Postal Services: VAT

Baroness Miller of Hendon: asked Her Majesty's Government:
	What response they intend to make to the European Union proposal for VAT on postal services.

Lord McIntosh of Haringey: My Lords, the Commission has not yet made a proposal for VAT on postal services.

Baroness Miller of Hendon: My Lords, I understand from the discussion paper that the Commission is considering doing so. It has been a year since the noble Lord, Lord Simon, responded to a Question from the noble Lord, Lord Stoddart. Have the Government come to a conclusion as to what they will do if a firm proposal is put forward, as seems likely?

Lord McIntosh of Haringey: My Lords, we do not know what the proposal will be. If the noble Baroness is concerned that we will accept a tax on stamps, I can say that that is a decision which requires the unanimous agreement of all member states. The Government have made clear that they will not give their agreement to such a tax.

Lord Ezra: My Lords, first, is this issue linked with the proposals for the progressive opening up of the EU postal market, the next step for which is due in 2003? Secondly, can the Minister indicate the Government's attitude to that development?

Lord McIntosh of Haringey: My Lords, it is linked to the proposals for the opening up of the market for postal services. One of the major issues in that regard is that of monopoly which, under the Postal Services Bill now before another place, is being replaced by the licensed area proposals, whereby a licence has to be obtained by the Post Office and any other competitive body from the new Postal Services Commission. The proposals being made by the European Community are that the licensed area should be no greater than that required for the universal service obligation. As the noble Lord will know, we are committed to the universal service obligation.

Begging

Baroness Sharples: asked Her Majesty's Government:
	Whether they have any plans to change the law regarding the sentencing of aggressive beggars.

Lord Bassam of Brighton: My Lords, a person convicted of begging in a public place may be sentenced to a fine of £1,000. Depending on the circumstances of the case, aggressive or intimidatory begging, or using children for begging, may lead to prosecution for offences carrying a custodial sentence. We have no plans currently to increase the sentences for offences relating to begging.

Baroness Sharples: My Lords, I thank the Minister for that reply. Am I right in thinking that the police cannot take people's fingerprints when they are accused of begging? Assuming that the beggars are also asylum seekers, is the Home Secretary likely to implement his suggestion that they should be fast-tracked?

Lord Bassam of Brighton: My Lords, we should not necessarily assume that all beggars are asylum seekers. Far from it. However, the noble Baroness is right in relation to fingerprinting. The Government are giving consideration to the issue of fast-tracking those asylum seekers who beg. We will no doubt be commenting on that in the near future.

Baroness Turner of Camden: My Lords, does my noble friend agree that there is little justification for the hysteria whipped up by the tabloid press on the whole question of beggars and asylum seekers?

Lord Bassam of Brighton: My Lords, my noble friend speaks with great wisdom on this matter. We must look at these issues carefully and proportionately and take appropriate and firm action if and when required. That is the sensible and humane approach.

Lord Dholakia: My Lords, does the Minister accept that the existing laws on begging are adequate and that additional sentencing provisions would not be helpful? Perhaps I may point out that begging is not restricted to asylum seekers; others beg too. Also, does the Minister consider that the voucher system meant for asylum seekers is inadequate? Will he undertake to review the system to ensure that those with children have adequate resources to buy nappies and toys? Moreover, will he ask the Home Secretary to use a balanced approach when publicly speaking on these matters?

Lord Bassam of Brighton: My Lords, the Home Secretary already takes a balanced view of these matters. We feel that the procedures are right in relation to asylum seekers and we have made adequate provision for those who are destitute.
	In relation to begging generally, I looked carefully at the statistics and found that in the mid-1980s 500 people a year were convicted. In the last year for which we have figures, 2,025 people were convicted. It is also the case that the law was changed in regard to the sentencing of beggars in 1982 when the party opposite downgraded the offence. The term "incorrigible rogues" was removed from the provision, plus the ability to send such people to prison. The then government felt that the offence was so minor as to warrant only a fine. That was their attitude at the time; it seems that their attitude has now changed.

Lord Stoddart of Swindon: My Lords--

Baroness Oppenheim-Barnes: My Lords--

Lord Stoddart of Swindon: My Lords, it is the turn of this side; but I shall give way to the noble Baroness.

Baroness Oppenheim-Barnes: My Lords, I thank the noble Lord from the bottom of my heart. He displays his usual wisdom in these matters.
	Can the Minister say whether, in cases of persistent begging with very young children who have unquestionably been drugged, it would be more practical, rather than giving money for nappies, to take those children into care?

Lord Bassam of Brighton: My Lords, the noble Baroness has struck a strange note. Local authorities have more than adequate powers to take children into care if they believe that they are vulnerable. In the circumstances that the noble Baroness describes, children may well be vulnerable. Under Section 4 of the Children and Young Persons Act 1933 it is for prosecuting authorities to proceed against such beggars if they wish to do so. They may also consider instituting care proceedings.

Lord Stoddart of Swindon: My Lords, will my noble friend give an assurance that as a result of recent advice by the Magistrates' Association that penalties--that is, fines--should accord with people's ability to pay, we shall not find that aggressive beggars of any kind or of any nationality are sent away with a conditional discharge while people who park on double yellow lines are fined £500?

Lord Bassam of Brighton: My Lords, it is obviously not for me to determine how sentences should be passed or what the nature of those sentences might be. However, I think it must be accepted wisdom that the penalties imposed fit the nature of the crime. That is what is enshrined in law. That is the general approach. I am sure that the courts will follow that general and sensible approach. I believe that the sentence passed on someone for begging will relate to the harm, the alarm and the level of distress caused by the begging. I have been alarmed in the past by this activity, as, I am sure, have other Members of your Lordships' House. There are other times, however, when begging activity is entirely innocent.

Earl Russell: My Lords, does the Minister agree that beggars who are not in genuine need depend for their success on the belief of the public that there are beggars who are in genuine need? Does he agree that the best way to stop the public holding that belief is to ensure that no one falls through the safety net of social security?

Lord Bassam of Brighton: My Lords, that is a wise observation. There are, of course, beggars and beggars. People beg for different reasons and they beg for different things.

Baroness Young: My Lords, one of the most disturbing forms of begging is begging with children, particularly with babies. It is not at all an uncommon occurrence. I suspect that we have all witnessed it. What instructions are given either to the police or to social services departments with regard to such beggars? It is a disturbing sight. Small children are taught to beg, usually by their mothers in the cases I have come across. That is extremely bad for the children, whatever may be said about the adults.

Lord Bassam of Brighton: My Lords, I agree with the noble Baroness that that cannot be good for the children concerned. I believe that is common cause among us. Cases must be dealt with sensitively, as they are. Carefully considered advice has been given on this matter. As I have explained, begging is a prosecutable offence. People who are convicted can be fined. If Section 4 of the Children and Young Persons Act 1933 is applied, offenders can be imprisoned. No doubt, guidance must be followed in those circumstances. The overriding need is to protect the interests of the child. I believe that all Members of your Lordships' House would agree with that.

The Countess of Mar: My Lords, what is the purpose of fining a beggar?

Lord Bassam of Brighton: My Lords, that is a good question.

Lord Randall of St. Budeaux: My Lords, on the question of sentencing, does my noble friend agree that what is so offensive is the organised begging? There are some racketeers out there making large sums of money. Does my noble friend agree that if there is to be legislation on sentencing, first, we ought to get a firm grip on the extent to which we deal with organised begging?

Lord Bassam of Brighton: My Lords, that is obviously an operational matter for the police. They need to judge the circumstances. Clearly, there is organised begging; occasionally organised criminal groups beg. However, in those circumstances I have little doubt that the police, with the active support of the Government and, no doubt, all parties, will take firm action. When I have drawn such instances to the attention of the police, they have mounted campaigns and offensives. It is for the courts to determine what kind of sentence is appropriate for the cases that come before them. However, as was mentioned earlier, how does one fine beggars?

Lord Cope of Berkeley: My Lords, is the Minister confident that the new system of voucher support for asylum seekers, for which the Home Office is responsible, as from today, is sufficiently established and sufficiently robust to eliminate the need for asylum seekers to beg?

Lord Bassam of Brighton: My Lords, the new national asylum seeker support scheme is robust. I am convinced that it will be effective. I have no doubt that the company that is contracted to operate it will do an extremely good job in distributing the vouchers. It must be our hope and our wish that this situation does not lead to begging. As I have explained previously, my honourable friend in another place is considering that issue. We may well need to give it some further consideration. No doubt our action will be firm and swift.

Lord Hardy of Wath: My Lords, bearing in mind the reference to incorrigible rogues and my noble friend's reference to organised crime, I inform my noble friend that I received a begging letter from the Conservative Party this morning which I found unacceptable.

Expatriate Pensioners: Australia

Baroness Fookes: asked Her Majesty's Government:
	Whether, in the light of the decision by the Australian Government to terminate a social security agreement between the United Kingdom and Australia, they plan to increase the pensions of expatriates currently receiving frozen pensions.

Baroness Hollis of Heigham: No, my Lords. It is unfortunate that the Australian Government have decided to end this long-standing agreement, which goes back to 1953, but our priority is to help pensioners in the United Kingdom, particularly those who are less well off.

Baroness Fookes: My Lords, I thank the noble Baroness for that Answer, which was, perhaps, predictable. That stark remark will bring little comfort to the many pensioners living in countries where their pensions are frozen. Is it not time that this long-standing injustice, which brings hardship to so many people, was remedied?

Baroness Hollis of Heigham: My Lords, the UK Government currently spend £1.34 billion on supporting UK pensioners who have chosen to live abroad. If we were to follow the noble Baroness's recommendation, that bill would go up from £1 1/3 billion to £1 2/3 billion. Releasing that extra £ 1/3 billion required to unfreeze all frozen pensions is not a high priority of this Government, any more than it was of the previous government.

Lord Shore of Stepney: My Lords, will my noble friend at least think very hard about this issue? I remember dealing with this matter in Cabinet some years ago. There was never any question but that, morally, our fellow citizens who worked for us here in Britain and who then migrated overseas were entitled to a pension by virtue of their paid-in contributions. We did not update the pension because of the chronic shortage of foreign exchange, but morally the case was clear. When we were controlling capital movement, when tourists could spend only £50 a year abroad, and when all kinds of restrictions faced us, we could not do it, but morally these people have a right to a pension. Will the Government fulfil that obligation at the earliest moment?

Baroness Hollis of Heigham: My Lords, I do not share the views of my noble friend. Many of the pensioners currently in Australia, Canada, South Africa and New Zealand went out to those countries during their working lives and have for many years contributed to the economies of the countries that they joined. The UK state pension is not a funded scheme but a pay-as-you-go scheme funded by current taxpayers. Given the priorities of government expenditure, I do not think that it is reasonable to ask UK taxpayers to fund the pensions of those currently living abroad who chose to live abroad and who, for a long time, have contributed to the economies of those countries.

Lord Goodhart: My Lords, does the Minister accept that the level of pension such people receive will be dependent on the amount of time they spent in this country? If they left during their working lives, the pension will be reduced. Does she not accept that these people paid national insurance contributions and taxes while they were working here? By going abroad, they have relieved the National Health Service of the burden of looking after them in old age. Does not the noble Baroness agree that it is disgraceful that this Government and previous governments have refused to pay these people the increases in their pensions?

Baroness Hollis of Heigham: No, my Lords; again, I disagree. Most schemes were set up following the 1946 Act. Except for the 30 "unfrozen" countries where reciprocal arrangements were made and, possibly, some EU countries in waiting, there have never been any such agreements. Going back to 1946, there have never been agreements to uprate overseas pensions, particularly where those pensioners have chosen to live abroad and have often contributed for many years to the economies of those countries abroad. We believe that there are higher priorities for government spending.

Lord Stallard: My Lords, does the Minister accept that I have been raising this question in both Houses since 1980? There has never been an agreement with Australia, Canada, South Africa or New Zealand, but there have been agreements for reciprocal pensions to be paid with some 33 other non-Commonwealth countries. Does the Minister agree that the pensions we are talking about are those of people who may have left Britain for a number of perfectly good reasons and who, as has been said, have worked and earned their money here? I refer, for instance, to a widow who may have gone to Australia to live with her daughter or with her son. She is entitled to her pension, but this Government and previous governments have steadfastly refused to give such people pension increases. At the same time, is it not strange that we are now canvassing for their votes in elections? We have spent thousands of pounds on trying to force these people to vote for us in our elections while at the same time we refuse to allow them the pension to which they are entitled. Is it not time that a government showed a bit of common sense and decency about this issue?

Baroness Hollis of Heigham: My Lords, given the debates in the press recently, I hope that the noble Lord is not suggesting payments for votes.

Lord Higgins: My Lords, is it not the case that our pensioners in Australia are already in an unfavourable position when compared with those in countries which are members of the European Union? Will not this latest development make their position even worse? Does not the noble Baroness's argument apply equally to those in the European Union? Given the point made by the noble Lord, Lord Shore, is there not a case for going along with the idea of the Social Security Select Committee in another place that the question of whether or not action is taken on this issue should be decided on a free vote?

Baroness Hollis of Heigham: My Lords, as to the noble Lord's first point, we have reciprocal arrangements with the EU in order to free the movement of people of working age. Pensions were not the primary purpose of the legislation, but obviously they are a factor. That is not the situation with Australia and Canada. Approximately 17,000 Australians of pensionable age live in the UK; and approximately 215,000 UK pensioners live in Australia. The same disparity applies to other non-European Commonwealth countries such as Canada, South Africa and New Zealand. The arrangements with the EU are part of our obligations and they need to be honoured.
	As to the recommendation of the Social Security Select Committee for a free vote, it would not be particularly appropriate to ask the Houses of Parliament to hold a free vote on an issue which involves £ 1/3 billion of public moneys. I endorse the reply of the previous government; they thought this was an interesting proposal, but it was a proposal that they did not intend to follow.

Baroness Trumpington: My Lords, does the Minister agree that there are many war pensioners among expatriates? They are diminishing in number and therefore the amount of money required would, regrettably, get smaller every year. How much will the average expatriate get in English money per week in Australia after the present agreement expires?

Baroness Hollis of Heigham: My Lords, it would cost £300 million to unfreeze frozen pensions. The figure for Australia is approximately £125 million. As to the noble Baroness's second point, it may be that she misunderstands what the Australian Government are proposing to do. They are not proposing to uprate English pensions; they have never done that. At the moment, for UK pensioners in Australia to qualify for an Australian pension, they have to be resident there for 10 years and to pass a means test. The current agreement, which goes back to 1953, is that UK national insurance contributions may count towards that 10-year residence period. The same is true in reverse; Australian periods of contribution count towards the English state pension. The removal of the current agreement would affect some 850 people in Australia and some 1,000 Australians living in the UK. So, perversely, the effect of Australia reneging on an agreement which has been in place since 1953 will be to save the Government money.

Earl Russell: My Lords, the Minister is aware that we are increasingly living in a global economy. Does she agree that if states, jointly or severally, fail to meet the needs of those who live in a global economy, that could prove as dangerous to the political health of the state as it already is to the financial health of pensioners?

Baroness Hollis of Heigham: My Lords, the noble Earl was kind enough to give me notice of his question; I suspect on the grounds that he thought it unanswerable. He is right; it is, but I shall have a go. I cannot conceive of globally co-ordinated social security--if that is what the noble Earl has in mind--between, say, sub-Saharan Africa and Sweden. Our view and the view of the previous government is that it is for national governments to decide the terms of their social security schemes in the light of their national economies.

VAT and Duties Tribunals

Lord Goodhart: asked Her Majesty's Government:
	Whether they have considered transferring responsibility for the appointment of members of the VAT and duties tribunals from the Treasury to the Lord Chancellor's Department.

Lord McIntosh of Haringey: My Lords, the tax appeals tribunals are the subject of a consultation paper published by the Lord Chancellor in March of this year. One of the issues on which views are sought is the responsibility for appointments of lay members to the VAT and duties tribunals. The closing date for responses to this consultation document is 30th June 2000.

Lord Goodhart: My Lords, I thank the Minister for that Answer. But does he accept that the Treasury has a very direct interest in the outcome of decisions by these tribunals? Does he accept that it is certain that as soon as the Human Rights Act comes into force there will be a challenge to an adverse decision on the ground that the decision was taken by a tribunal which was not independent and impartial? Does he accept that there is a very good chance indeed that such a challenge would succeed? Does he accept that, in order to protect public revenues, it is very important that as soon as possible this kind of challenge should be made impossible by transferring the responsibility for the appointments to the Lord Chancellor's Department, which already has responsibility for appointing the chairmen of these tribunals?

Lord McIntosh of Haringey: My Lords, for many years it has been the practice in this country that the appointments to panels of this kind should be the responsibility of the same department as that which is responsible for the administration of the matter before the tribunals. But, of course, the issue raised by the noble Lord is one on which views are sought in the consultation paper to which I referred in my first Answer. Although I cannot confirm what the noble Lord said about the Human Rights Act and what the result of any appeal would be, that is one of the issues which the Lord Chancellor will take into account in responding to the responses to the consultation document.

Lord Skelmersdale: My Lords, has not the Human Rights Act become a great big bogey? Did we not sign the convention many years ago--even decades ago--and is there not recourse to that legislation through Strasbourg, although it takes a long time?

Lord McIntosh of Haringey: My Lords, the noble Lord is strictly right. If the case had been as clear as the noble Lord, Lord Goodhart, implied in his Question to me, an issue of this kind could have been brought to the European Court indirectly. The effect of the Human Rights Act is that it can now be taken directly.

Lord Saatchi: My Lords, is it a breach of the human rights of the British public for the Government to tell them that their taxes are going down when in fact they are going up?

Lord McIntosh of Haringey: My Lords, the noble Lord keeps on trying with unanswerable questions. Indeed, if he chooses to engage in discussion with me on tax burdens rather than on human rights issues, he will find us talking at cross-purposes, as we so often do.

Business

Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord McIntosh of Haringey will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the latest developments in respect of Rover. The Statement is likely to be taken after the speech of the noble and learned Lord, Lord Howe of Aberavon, in the first debate.

Political Parties, Elections and Referendums Bill

Lord Bassam of Brighton: My Lords, I beg to move that this Bill be now read a second time. The core purpose of this Bill is nothing less than to reinvigorate our democracy. Over the past decade or so public confidence in our democratic institutions has suffered as a result of the now well documented instances of financial sleaze that at times seemed to pervade the political life of our country. This is not the time or the place--or perhaps the day--to point the finger at particular individuals or particular parties. The debate, as we have seen in another place, has now moved beyond that. But the secretive funding of our political system, including funding from a number of foreign sources which had no direct stake in the future of this country, has undoubtedly left a sour taste.
	We came into government determined to clean up the way we conduct the politics of this country. One of our early acts on entering government was therefore to refer the whole matter of the funding of political parties to the Committee on Standards in Public Life, as we had repeatedly pressed the previous government to do. Perhaps I may say how pleased I am to see in the Chamber today members of that committee: the noble Lord, Lord Neill of Bladen, who, of course, chairs the committee, my noble friend Lord Shore of Stepney and the noble Lord, Lord Goodhart. I particularly look forward to their contributions to the debate on the Bill and I am sure the whole House will be anxious to hear what they have to say on these important matters.
	Among the issues which we asked the Neill committee to examine were how best to give effect to our two other manifesto commitments in this area--to ban the foreign funding of political parties and to require the disclosure of donations of more than £5,000. As the House will know, the Neill committee reported in October 1998. Its report and recommendations mark a turning point in the way we conduct the political life of this country. The committee found that once you lift the lid on the funding of political parties, a whole range of wider questions present themselves. I should like to place on record my thanks to the noble Lord, Lord Neill, and to his colleagues for the authoritative and incisive way in which they examined the wide range of issues that are covered in their report. Their recommendations provide the foundations of this Bill. Indeed, it is to their credit that, with only one notable exception, we can map those recommendations across to the clauses of and schedules to this Bill.
	This is perhaps as good a point as any to deal with that one exception; namely, tax relief. I am conscious that the Neill committee laid heavy emphasis on the fact that its recommendations had been conceived as part of an overall integrated scheme which should be considered as a whole. This Government have no desire to cherry pick from the committee's 100 recommendations. Indeed, in the spirit of bipartisanship, we have studiously avoided doing so. In the case of tax relief, however, we are simply not persuaded that the case for the recommendation has been made out. In particular, the Government do not believe that a tax relief scheme for political donations sits comfortably with the committee's conclusion, which we share, that there should be no system of general state aid to political parties, Moreover, it falls to the government of the day to make the difficult choices about spending priorities. As the Chancellor of the Exchequer made clear in his Budget Statement last month, this Government's priorities are efficient and effective healthcare and excellence in education. This is not the time to give a tax hand-out of £4 million or £5 million to political parties.
	Tax relief aside, we have sought faithfully to give effect to the other recommendations of the Neill committee. In doing so, we are conscious of the need to take the other main political parties with us where at all possible. Save on a small number of specific issues on which I shall touch later, there was a broad measure of cross-party support for the provisions of the Bill during its passage in another place. I very much hope that we can consolidate and build on that broad consensus so that the Bill that we return to another place is one that will stand the test of time as an important part of our constitutional arrangements. We are going to attend carefully to what this House says on the Bill, and we are ready to discuss any matter at any time with representatives of the other parties.
	I shall now turn to the detail of the Bill. Part I establishes the electoral commission on which so much of the rest of the Bill depends. A number of Members of your Lordships' House have long argued for such a body to reinforce the integrity of our electoral arrangements. Among these I am pleased to see the noble Lord, Lord Plant of Highfield, and the noble Baroness, Lady Gould of Potternewton, in their places. It is essential to the effective working of the controls on parties' income and expenditure that they are rigorously enforced. But the electoral commission will be much more than simply an enforcement body. Another key function will be as the moderniser of our electoral system. You Lordships have only recently had an opportunity to examine what needs to be done to bring our electoral machinery into the 21st century. A number argued that the Representation of the People Act, as it now is, did no more than advance the way we organise and conduct our elections into the 20th century. If that is the case, the electoral commission will have its work cut out to ensure that our electoral law and procedures finally catch up with the 21st century.
	The electoral commission will also play a key role in promoting a greater sense of citizenship. This will involve more than simply encouraging voter turn-out at elections, although the commission will undoubtedly have a part to play in that. Indeed the problem of low turn-outs, particularly at local and European elections, cannot be addressed without promoting a wider understanding of both the rights and responsibilities we each have as citizens in a democratic society.
	In order to undertake these and the many other functions conferred on it by the Bill, the commission will need to be seen to be scrupulously independent both of the government of the day and of the political parties. We agree with the Neill committee's statement at paragraph 10.8 of the report that the commission, unlike the United States Federal Election Commission, should consist of independent persons and not of party representatives. We also agree that the commission's members should not be people who have previously been involved in any substantial way in party politics. Such involvement would clearly include serving as an MP, MEP or local councillor and holding office within a political party, perhaps as the chairman of a constituency association. That is an important point about the electoral commission which should not be left to the government of the day or to a selection panel. It should be set out on the face of the legislation. I shall be bringing forward amendments in Committee. To judge from debates in the other place, they will command general support.
	I should point out that the Bill already contains a number of important safeguards to guarantee the political neutrality of the electoral commissioners. In particular, these will be Crown appointments and not ministerial appointments. What is more, the appointments may only be made with the agreement of the Speaker of the House of Commons and after consultation with the leaders of all parties with two or more Members of Parliament.
	Finally, the selection process, which we intend to commence within the next month, will be conducted in accordance with the code of practice on public appointments. In keeping with the provisions of the code the posts will be publicly advertised and the whole selection process will be overseen by an independent assessor.
	Part II of the Bill sets out the arrangements for bringing political parties within the regulatory control of the electoral commission. In large measure the provisions of this part re-enact, with modifications, those of the Registration of Political Parties Act 1998. There is, however, one important difference between the scheme as set out in the 1998 Act and the scheme in this Bill. Under the 1998 Act, the registration scheme was essentially a voluntary one. Under the Bill, organisations which support candidates at an election are effectively obliged to register with the electoral commission. It is only by introducing this measure of compulsion that all political parties can be brought, as clearly they must be, within the scope of the controls on donations and campaign expenditure.
	Consequently, it will no longer be possible for an independent candidate to include a description against his or her name on the ballot paper--unless, that is, the person or the organisation which he or she represents, if any, first registers as a political party, There may be different views on whether this change in itself is good or bad. But it is certainly, we think, unavoidable. If we continued to allow independent candidates to enter a description on the ballot paper, it would be open to an organisation to circumvent the controls on parties' income and expenditure by supporting any number of supposedly independent candidates up and down the country each of whom used the same description on the ballot paper. Because all these candidates had adopted the same description it would be possible to run a nation-wide advertising campaign in support of their election.
	Before I leave Part II, I want to outline important changes to the registration scheme that the Government will be bringing forward in Committee. The purpose of these changes will be twofold. First, we shall be proposing a separate registration scheme for parties in Northern Ireland. The Neill committee, in its response to the draft Bill published last summer, rightly pointed out that any exemptions for Northern Ireland parties from the controls on donations in Part IV should apply to all such parties. As drafted, Clause 65 defines a Northern Ireland party as a party with one or more MPs elected for a Northern Ireland constituency or with one or more Assembly Members. The separate registration arrangements for Northern Ireland parties will enable all parties operating in Northern Ireland to benefit from the terms of an order made under Clause 65.
	While on Clause 65, I ought to address the more fundamental objections that were raised when the clause was considered in another place--

The Earl of Onslow: My Lords, perhaps I may ask the Minister a question for clarification. Is that to allow the Northern Ireland parties to receive funding from the United States which would not be applicable to other parties?

Lord Bassam of Brighton: My Lords, I shall attempt to address that point in my concluding comments.
	The position of the Official Opposition has been that the ban on foreign funding and the requirements as to disclosure should apply as much to Northern Ireland as to the rest of the United Kingdom. In principle at least I do not disagree. But the fact remains that politics in Northern Ireland are not conducted on the same basis as politics in Great Britain. There is no reason to suppose that the publication of the names of donors to the Conservative or Labour Parties will place those donors at any risk. The same cannot, unfortunately, be said of a person who donates to the Ulster Unionists, the DUP, the SDLP,or Sinn Fein. It is also the case that at least two of these parties receive a significant proportion of their funding from or via the Irish Republic. In such circumstances it is simply not realistic to seek to apply the new provisions in full and overnight. The Neill committee recognised all these difficulties and it was the committee that recommended that Northern Ireland parties should be exempt, at least for an initial period, from the controls on donations. Clause 65 gives effect to the relevant recommendations and is as much a part of the Neill package as the other provisions of the Bill.
	Returning to the registration scheme in Part II, the second aim of the amendments that we intend to introduce in Committee is to allow a party to confine its registration to one part of Great Britain. The objective is to enable a "sister" party to register in another part of Great Britain. Under the provisions of the 1998 Act, the Scottish Green Party has been unable to register despite the fact that the Green Party (which is a registered party) organises only in England and Wales. That is an anomaly which cannot stand. As I understand it, the Green Party and the Scottish Green Party are two wholly separate organisations with no constitutional links with one another; the registration scheme should be able to cater for such circumstances.
	While I am on the subject of ensuring that the Bill fits the circumstances of parties, I should also mention the Liberal Democrats. They have concerns about the impact of the Bill's requirements on their federal party structure. I believe that all the main parties accept that they will have to modify the way they operate, to some degree at least, in order to adapt to the provisions of the Bill. But I can assure the House that we want, if at all possible, to find ways around the concerns that the Liberal Democrats have, and we are in active discussions with them.
	I can deal quickly with Part III of the Bill, which is concerned with accounting requirements. The requirements on parties to keep proper accounts and produce an annual statement of accounts are ones which I would expect any members' organisation to follow in any event. The provisions of Part III will help reinforce best practice in this area. We remain open, as we have been in the other place, to representations on the detail.
	Part IV gives effect to the ban on foreign funding of political parties and the public disclosure of large donations. I accept that the scheme for implementing these controls, based on the Neill report, is a detailed one. It will have an impact on the administration of political parties. There is no getting away from that. We are, of course, ready to listen to any proposals your Lordships may have for simplifying the scheme as set out in this and other parts of the Bill. But, in considering any such proposals, the test that must be applied is whether the scheme is sufficiently robust to achieve its purpose.
	The rules on donations, as recommended by the Neill committee and set out in the Bill, are tight. They extend not merely to cash donations but also to donations in kind and to sponsorship. We felt it right to make amendments in another place to soften the impact of these requirements in one small degree. As it now stands, the Bill would allow a party, or an individual or group, to receive travelling and subsistence expenses for the purpose of visiting another country, even if the money comes from an otherwise non-permissible source. For example, the provision would allow the Government of Gibraltar to continue to support visits by Members of Parliament.
	There is a further change which we propose to make to the Bill in your Lordships' House, although it follows on from debates in another place. There is a consensus that it would be unduly restrictive to require the cost of exhibition stands at party conferences to be regarded as sponsorship or a donation. We propose to bring forward amendments to make this clear, building on helpful suggestions which the noble Lord, Lord Neill, has made in a letter to my right honourable friend the Home Secretary.
	Parts V and VI of the Bill control election expenditure by political parties and third parties respectively. This is one area where our electoral law has failed to keep up with the realities of modern-day election campaigning. The existing law, as set out in the Representation of the People Act 1983, regulates in considerable detail spending by individual candidates and their agents at the constituency level. The spending limits imposed by the 1983 Act are quite modest: about £8,000 for the average parliamentary constituency. In contrast to these tight restrictions on individual candidates, the political parties are free to spend unlimited sums at national level. This has led to what the Neill committee termed the "arms race" in election spending.
	At the previous election some 3,700 candidates spent in aggregate just under £13 million. This sum was dwarfed, however, by the £28 million spent by the Conservative Party and the £26 million spent by the Labour Party. If spending by political parties were left unchecked, the sums involved could well exceed £30 million on each side by the time of the next election, with more to follow as time went on. Elections should be a contest between values, policies and ideas, not between purses. An election cannot be said to be fair if the result is determined by which side can outspend the other. There must be some check against the relentless need to seek large donations. The controls on expenditure set out in Parts V and VI are long overdue and will ensure that in future elections there is a level playing field as between the main political parties.
	As to Part VII, I come to the one part of the Bill where we have not yet managed to establish the same degree of cross-party consensus as we have with the other nine parts. Part VII is concerned with the conduct of referendums. It is important to record that this part of the Bill is not concerned about the conduct of any particular referendum but about the conduct of referendums generally. That fact was obscured during some of the debates on Part VII in another place. The essential aim of this part of the Bill is to ensure that each side in a referendum campaign has a fair opportunity to put across its case to the electorate. To this end, the Bill provides for the Electoral Commission to designate an umbrella organisation on each side of a referendum campaign. Each side will be eligible for a grant of up to £600,000, a free mailing of a referendum address and free air time for referendum broadcasts. These arrangements at least have been generally welcomed.
	In addition, Part VII provides for the designated umbrella organisations, and other individuals and bodies campaigning in a referendum, to be subject to spending limits. Your Lordships' House will be aware that the Neill Committee came down against expenditure controls in a referendum, not as a matter of principle but on grounds of practicality. It is the view of the Government that as a matter of principle there should be spending limits in a referendum. The arguments are essentially the same as for an election. Fair play surely demands that there should be some safeguards against the possibility of the whole campaign being skewed by one wealthy individual or organisation.
	As to the practicalities, the solution can be found in the Neill committee's own proposals for controlling donations made to referendum campaign organisations. The Neill scheme requires such organisations to be registered with the Electoral Commission for the purpose of applying the ban on foreign funding and the requirements as to disclosure. Once such organisations have been brought within the regulatory remit of the Commission it is then perfectly possible to apply spending controls to them.
	How the Bill deals with Recommendation 89 of the Neill committee's report has also attracted much comment. The committee argued in Recommendation 89 that the government of the day should remain neutral in a referendum campaign and not distribute at public expense literature setting out or otherwise promoting its case. We believe that Clause 120 gives effect to that recommendation in a straightforward and unstinting way. There is an absolute prohibition on the government of the day publishing, displaying or distributing promotional material in relation to a referendum in the 28 days prior to the date of the poll.
	Suggestions have been made that this 28-day "purdah" period is too short. The period is, however, wholly consistent with the average length of a general election campaign, with which the Neill Committee drew a parallel. Furthermore, in its response to the draft Bill the Neill committee welcomed the way in which the Government had responded to its recommendation on this issue.

Lord Marsh: My Lords, I am grateful to the Minister for giving way. Perhaps I may revert to the question of funding where an organisation does not fund any party's campaign but runs a parallel campaign. To pick an example at random, the European Commission has, quite legitimately, information offices throughout the UK and would have a very clear view on a referendum on EMU.

Lord Bassam of Brighton: My Lords, that is an important issue to which we shall no doubt give further consideration as we go through the Bill.

The Earl of Onslow: My Lords, does the noble Lord's response indicate that he does not have the faintest idea of the answer to the question?

Lord Bassam of Brighton: My Lords, I am grateful. For example, candidates will be subject to controls on the source and disclosure of donations similar to those now introduced for parties. The opportunity has also been taken to modernise or remove a number of provisions of the 1983 Act which are now out of date. As I have said, it will fall to the Electoral Commission to continue this modernising process.
	There is another amendment to the 1983 Act which I propose to table in Committee. As many of your Lordships will be aware, the existing £5 limit on what a third party may spend in support of, or in opposition to, a candidate at an election has been held by the European Court of Human Rights in the case of Bowman to amount to an unjustified restriction on freedom of expression. As recommended by the Neill committee, I shall table an amendment to increase the limit to £500 in the case of a parliamentary election. A limit of £50, plus 0.5p per elector, will apply to local government elections. With the agreement of the Scottish Parliament and Executive the amendment (to Section 75 of the 1983 Act) will extend to local government elections in Scotland.
	Part IX gives effect to the Neill committee's recommendation that a company should be required to have the consent of its shareholders before making donations to political parties and other political organisations. It is now widely accepted that political donations by a company are of such a unique nature that the decision to make these donations should not be left to the general discretion of the directors. The requirement to seek the approval of shareholders at least once every four years will not be onerous but will ensure that companies maintain the highest standards of corporate governance.
	I shall confine my comments on Part X of the Bill to Clause 134, which is concerned with the qualifying period for registration as an overseas voter. This provision does not stem from the Neill committee but from the Home Affairs Select Committee in another place. In its 1998 report on electoral law and administration the committee unanimously concluded that the existing 20-year qualifying period was excessive and proposed a reduction to five years. The Government agree with the committee's view that the existing qualifying period is excessive. It is wrong surely that British citizens who have lived abroad for a considerable number of years, and who have in many cases effectively severed their ties with the United Kingdom, should continue to be able to influence the outcome of elections here. That said, the Government felt that a reduction in the qualifying period to five years went too far in the other direction. Therefore, they have opted in the Bill for a qualifying period of 10 years.
	I am aware that this clause was subject to considerable debate in another place. At Report stage a number of amendments were lodged which pulled in a number of different directions. In responding to those amendments the Parliamentary Under-Secretary at the Privy Council Office indicated that the Government remained ready to listen to alternatives to the 10-year qualifying period in Clause 134. This is very much the sort of provision which should, if possible, be the subject of a political consensus. We shall listen with close interest to what your Lordships have to say on this matter, and particularly to any suggestions which could pass the consensus test.
	Finally, I should like to say a few words about the timetable for commencement. The lynchpin will be the successful establishment of the electoral commission. I have already indicated that we intend to commence the selection process for the electoral commissioners within the next few weeks. Subject to the Bill receiving Royal Assent by the Summer Recess, we would hope that the appointments could be made by November. Thereafter the priority will be to bring the controls on donations and campaign expenditure into force. Ideally this will be done in time for the next general election. Whether this is possible will naturally depend on when the election is called. Realistically, the earliest that Parts IV to VI of the Bill can be brought into force is in March or April 2001. Thereafter there is likely to be some staggering of the implementation of the other functions of the electoral commission. In particular, we do not envisage transferring the functions of the four Parliamentary Boundary Commissions to the electoral commission until after they have completed the fifth general review of parliamentary constituencies in 2005 or thereabouts.
	This Bill will do much to strengthen public confidence in the democratic process. It will ensure that there is full transparency and openness in the funding of political parties and reinforce the existing rules for the fair conduct of elections and referendums. These are reforms which in many respects are long overdue. They are vital to the health of our democracy. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.--(Lord Bassam of Brighton.)

Lord Mackay of Ardbrecknish: My Lords, I do not envy the Minister his task in explaining the detail of the Bill. What at first sight would seem to be a few simple, easily understood propositions in the Fifth Report of the Committee on Standards in Public Life have been turned into a long, complicated and, in many places, pretty impenetrable legalese which no ordinary person could be expected to follow. If ever a Bill needed to be written in plain English, it is this one, affecting as it does the very building blocks of our parliamentary democracy.
	This Bill will need to be understood not just by the treasurers of our parties nationally--they may have access to legal opinions--but by the treasurers of every constituency association of every political party up and down the land. Frankly, if a potential candidate for the office of treasurer--it is never the easiest office to fill in any organisation--finds that he has to read, mark and inwardly digest the stuff in this Bill, he will pass up the chance of being constituency treasurer; and, worse, he will advise all his friends to do likewise--and we are supposed to be encouraging people to participate in the political process!
	What are the simple propositions to which we can probably all agree, at least in part? First, there should be an electoral commission. Secondly, it should be responsible for the registration of political parties. Thirdly, there should be rules on the conduct of referendums, and these should be overseen by the electoral commission. Fourthly, there should be transparency in the larger donations to political parties and to other bodies which attempt to influence the outcome of elections and referendums. Fifthly, no foreigner should donate to political parties--although who exactly is a foreigner is an interesting question which my noble friend has already raised.
	I start with the electoral commission. Your Lordships will recall that during the passage of the Referendums (Scotland and Wales) Bill in the summer of 1997, I argued in favour of a general referendums Bill to cover all referendums, and a referendums commission to oversee their conduct. I prayed in aid the report of the Commission on the Conduct of Referendums which was set up by the Electoral Reform Society and the Constitution Unit, and chaired by Sir Patrick Nairne. I see that the noble Baroness, Lady Gould of Potternewton, remembers my amendments. When we discussed the Registration of Political Parties Bill (now an Act), the need for an electoral commission also arose.
	In many ways, the Government put the cart before the horse by introducing referendums and registration before setting up the proper body to deal with those issues. But I suppose we should be thankful that at last they have got round to setting up the commission--better late than never. We shall want to explore the kind of person who will be a commissioner and how that membership will be decided. There must be no possibility of the commissioners being Tony's cronies. I listened with interest to the Minister on the issue of who would be commissioners. I look forward to reading his amendments, and perhaps bringing forward some of my own.
	We shall want to explore the way in which the boundary commissions will be composed; and the relationship between the Scottish Executive and Parliament as regards boundaries in relation to Westminster, Scotland and local government. I shall want to study carefully the Minister's remarks that the Government have no intention of bringing the next boundary commission within the rules of the electoral commission. I find that a very odd way for the Government to approach the issue.
	We shall want to look critically at Clause 12(1). We are concerned that the commission might become a propagandist for electoral change and, even more oddly, for the European Union. I cannot understand what the first subsection of Clause 12 means.
	We look forward to government amendments--it sounds as though we shall have many, but that is par for the course for most of the Bills which arrive in your Lordships' House--which will link the commission with the Representation of the People Act which we passed a few weeks ago. It is another example of putting the cart before the horse.
	I turn to the commission's role in the Registration of Political Parties Act 1998. Your Lordships will remember our debates on that Bill. My suspicions and fears about Government putting forward legislation to regulate political parties were somewhat underlined today when I heard the Minister talk about the regulatory control of political parties. Perhaps that is what Mr Cook will talk about today to Mr Mugabe; I am sure that he would very much like a lesson on the regulatory control of political parties. The amazing thing about the Bill is that it repeals the 1998 Act. Is that a record? Why do the Government feel it necessary to do that and to add 16 clauses to what is already a large and cumbersome Bill? In Committee, I shall be looking to the Minister to justify any changes he has made to the 1998 Act in its shift into this Bill.
	I turn to referendums. In Committee I shall be judging the details of the Bill against the proposals of the Nairne commission--proposals which were largely, but not wholly, echoed in the Neill committee's report. We shall want to explore the omissions. For example, do we have pre-legislative referendums or post-legislative referendums? Who decides the question? That is perhaps the most important question. What, if any, thresholds should be used to judge the result?
	I welcome the fact that the Government accept the recommendation in Nairne and Neill that umbrella campaigning organisations should be recognised for core funding. Both Nairne and Neill looked at the case for capping expenditure and referendums. The Minister spoke about that at some length; and I am not surprised. The Government have cherry-picked both Nairne and Neill as regards this matter. At page 75, paragraph 14, Nairne said:
	"On balance, it is not considered practical to exercise government control over the total expenditure by those campaigning on either side in a referendum. Umbrella campaigning organisations should be required to undertake to provide accounts of monies received or spent on the campaign if they are to qualify for public money or services in kind".
	Neill said that, perhaps more dramatically at paragraph 12.46 on page 170. Referring to the capping of expenditure, he said:
	"It appears to us that under these circumstances it would be impracticable to try to control campaign spending. The number of individuals and organisations involved would often be too large. The time-scale would often be too short. Adequate accounting procedures would often be impossible to put in place. The administrative apparatus required would resemble one of Heath Robinson's most outlandish contraptions-- and would almost certainly not work".
	The Government will have to explain in detail why they have chosen to go against those recommendations. When I read the Bill, I wondered whether it was to show in Clauses 106 to 113, and more particularly in Schedules 12 and 13, which I invite your Lordships to read during a quiet moment, what exactly a Heath Robinson contraption looks like. I suggest that those two schedules are just that. I should have thought that transparent donation would be more than sufficient.
	If the Government's motive is to have a balanced financial position between the sides in the referendum, their legislation fails. Let us consider the referendum in Scotland in 1997. The Bill does not indicate how the limits would be calculated, but, for easy counting, let us assume that it would be one-tenth of the UK figure given in Schedule 13. Each umbrella organisation would have been able to spend £0.5 million. The three parties in favour of a "yes" vote would have been able to spend between them £1.2 million. That is a total for the "yes" side of £1.7 million. The Conservatives would have been allowed £0.3 million, which would have given the "no" side £0.8 million. According to my arithmetic, £1.7 million and £0.8 million are not a balance, especially when the trade unions can pitch in with perhaps fifty grand each, as can a few more bodies on either side.
	However it would have worked, there would have been no balance in the expenditure limits at that Scottish referendum. I suggest that it would be the same for any referendum one contemplates in the future. Therefore, Schedule 13 does not create balance; it ensures imbalance. Perhaps Nairne and Neill were right. We shall want to hear some convincing arguments from the Minister before we let the Bill go down that road.
	Finally, I turn to donations and expenditure. Expenditure is simpler because it builds on the well-used system employed to limit expenditure by candidates in their constituencies during elections. We have no difficulty with the simple idea that there should be a limit, but that is where simplicity ends and the complexity, so beloved of this Government, takes over.
	First, the limit is to cover 365 days leading up to the election. So my question to the Minister is: at this moment, are we inside that period for the next election or are we not? The Minister will not answer, even if he knows--and I doubt that he does. I do not blame him either way, but the mere fact that I can ask a question which every one of your Lordships knows is impossible to answer shows that the proposition is ridiculous. Have your Lordships heard anything so daft as counting expenditure in a whole year before an election, the date of which is known only to one person--namely, the Prime Minister--and, I suspect, not even to him at this moment? It would be retrospective accounting. The suggestion is crazy.
	What is wrong with using the definition of "election period" used for constituency expenditure at the time of an election? That is simple. Or, if the Government want to cast their net a little wider, why not start the clock ticking when the Prime Minister announces the date of the election and Parliament rises?
	However, I promise your Lordships that the proposal gets dafter! As regards elections to the European Parliament, the Scottish Parliament and the Welsh and Northern Ireland Assemblies, the period is to be four months before the date of such an election. That is a little easier because those elections are fixed, but there is every likelihood that there will be overlapping between some (and perhaps all) of those elections. That is where Part III of Schedule 8 comes in because it tries to deal with the various combinations of overlapping which might occur. It is seriously incomprehensible gobbledegook. I shall not read it to your Lordships now, but I promise those of your Lordships who are to attend the Committee stage that I fully intend to read it out then and to demand clear, simple explanations from the Minister. I give him plenty of warning of that. Frankly, I believe that the Government should abandon that system and use the one that is more related to our normal way of dealing with the situation; that is, to define the election period as the three or four weeks leading up to the election.
	Then there are the expenses of the third parties--no, in this case, not the Liberal Democrats, the SNP or Plaid Cymru, but organisations such as pressure groups which want to campaign in the election, or individuals such as Mr Souter who is so annoying the Labour Party in Scotland by campaigning against the repeal of Section 28, or Section 2A as it is in Scotland. As we know, the cap for an organisation campaigning in a UK election is to be about £1 million.
	Guess what, my Lords: trade unions affiliated to the Labour Party and taking part in elections in the Labour Party (elections of the leader, the recent elections of the mayoral candidate for London), and giving help in cash or in kind to the Labour Party will be considered as third parties. Talk about Chinese walls! And of course each and every one of them will be entitled to spend £1 million campaigning for the Labour Party. If they were all to spend the money--I accept that that is a large assumption, but one must work out how Bills can be used--the Labour Party's allowed expenditure would simply double. I call that cheating--pure and simple.
	Mr Peter Riddell was kinder. At page 115 of the Neill report, he said:
	"Fuller disclosure should reduce the need for limits either on levels of donations or restricting central spending by parties. Overseas experience suggests that such limits can easily be evaded. Labour proposals for a national limit of £15 million on election expenses and of a tenth of this amount for national campaign spending by 'third parties' are open to abuse. Trade unions and other Labour allies could easily funnel money via such 'third parties', circumventing the intended national limit".
	Peter Riddell is clearly politer than I am, but my point is made. We shall certainly want to take the Government to task on why they allow their cousins to escape the cap on expenditure for the Labour Party.
	I turn from spending money to raising money. At paragraph 10.32 of the Neill report, the same Peter Riddell said:
	"the real issue concerns the raising of money rather than its spending".
	However, John MacGregor, who was a member of the standards committee, disagreed with his colleagues and took the view that the disclosure of donations, not their spending, is the key. Given the horrendous complications I have mentioned, perhaps we ought to think carefully about the opinions of two such experienced men as John MacGregor and Peter Riddell.
	Turning to donations, what I find surprising about the Neill report appears at the beginning, at paragraph 4.5 on page 45. In a report of this size, page 45 is near the beginning! It states:
	"In fact, the suspicions which are entertained concerning large givers are commonly lacking in any justification. We have been given no evidence that leads us to doubt that nearly all give generously either because they support the general aims of the party which they finance or in order to minimise the risk of the opposing party attaining power".
	Normally, if there is no evidence, there is no case and there is no need to take remedial action. However, that position appears to be too logical. The report, and subsequently the Bill, propose that all donations over £5,000 should be made public by reporting to the electoral commission and that no donations should be accepted from foreigners. It seems simple, but nothing is ever simple in this Bill.
	First, as regards donations, the boundary is set very inelegantly in a double negative of, "not less than £5,000". Why cannot it merely be "greater than £5,000", making £5,000 the limit? If someone wants to sign a cheque for £5,000, he will not have to declare it, but if it is for more than that, he will. That would seem to be a more sensible situation than opening up the old dodge, which we all see when we go shopping, of goods costing £9.99, or £19.99 or £99.99. In this case, it is £4,999.99 and I do not see the logic in it. I believe that £5,000 ought to be the top of the lower limit.
	Furthermore, why report during a general election every seven days? Are we really trying to make things as difficult as possible for party and constituency treasurers at the busiest time for them and everyone else? Surely, a report after the election, when the expenditure has to be submitted, is a sufficient check. Why have not the Government accepted Recommendation 39 of the Neill report? That states, at page 99:
	"Political parties should be eligible to claim under the tax relief scheme if at the last general election two members of the party were elected to the House of Commons or one member was elected and the party won at least 150,000 votes".
	The noble Lord, Lord Bassam of Brighton, told us that the Government did not agree. I was not in the least convinced about why they did not agree. Certainly, the cost of £4 million leaves me quite unmoved. I understand that that is approximately the cost to the taxpayer of the Labour Party supporters who work in departments in Whitehall as political advisers. When my party and other parties ask about that £4 million, we are told that it is "peanuts" in the whole scheme of things. If it is "peanuts" so far as concerns spending on political advisers, may I suggest that it is "peanuts" in this regard, too? If the Government want us to remain with the Neill report, they should jolly well not have cherry-picked it themselves first.
	I turn to the matter of the "permissible donor". As usual, that begins simply but ends up as a little minefield. One might have thought that "British citizens" would be a good place to start; but no. After all, some of them live abroad, many working for British companies and many working in British interests. However, unless they are listed on the register as "overseas voters"--and that will be made more difficult by the Government--they will not be able to donate. Yet, citizens of the Commonwealth and of the EU who are resident here even for a short time can get on to the register and contribute.
	Therefore, a Canadian citizen who is resident here for his work can register and donate. Yet, an American in exactly the same position cannot, unless that American stays in America and wants to donate to Sinn Fein/IRA. We all know where some of that money ends up, and it is not only in the democratic process. Yet, under the Bill, that will be all right. It is not all right in my book.
	Let us consider the Scottish example. Why should the Irish diaspora be allowed to donate to a party which is deeply mired in violence, but a member of the Scottish diaspora be forbidden from donating to the Scottish National Party, which has never been involved in violence? Although I have no truck with the Scottish National Party's principles, I shall want to know the Minister's answer to that. He will have to work very hard to convince me that his approach is right.
	I might be convinced of the Neill recommendation that citizens of the Irish Republic, or, to be logical, people on the register of electors in the Irish Republic, should be allowed to donate. However, I would put two conditions on that: first, they should be allowed to donate to any party in the UK, not only to the parties in Northern Ireland; and, secondly, any donation over the limit should be declared and made public. Otherwise, how will we ever know where the money is coming from and what source is providing those donations?
	Lastly, I turn to companies. We start with a simple proposition that shareholders should agree donations. Why the Government feel that they have to legislate is beyond me. Actually, it is not beyond me; I believe that it is called "spite". If shareholders did not want money to go to political parties, they could raise the matter at the annual general meeting and do something about it.
	Of course, the simple proposition soon collapses. Nevertheless, I hope that the Minister will be able to say that I am wrong in my reading of the Bill. A company incorporated in Europe and carrying out business in the UK will be able to give donations without seeking shareholder agreement. Therefore, for example, BMW might decide to give donations to any party (other than the Labour Party after the way that the Government have behaved) and it would not need shareholder permission; yet a British company would. That does not seem logical.
	As I have said more than once, the intention of the Bill is to implement a number of simple propositions, most of which it is fairly easy to agree with. However, by the time those simple propositions are translated into the Bill, they become complicated, contradictory, illogical, certainly bureaucratic, and expensive for the political parties to implement. We shall subject the Bill to intense scrutiny and shall expect proper debate in Committee. We shall expect the Government to attempt to simplify the Bill as we go along so that ordinary folk who are interested in politics can understand what regulatory provisions are being placed on the fundamental freedoms of people in this country. We shall hope also that the Government will act in a non-partisan way in relation to a Bill which, in my view, strikes in parts at the very heart of our democratic process.

Lord McNally: My Lords, I was quite looking forward to the Committee stage of this Bill until the noble Lord, Lord Mackay, explained how he planned to handle the schedules to it. Usually, his speeches are sparkling and witty. But the thought of him reading out in detail the schedules makes one think that it will be hard going. However, I agree with something that he said at the end of his speech. The Government may well have been motivated by feelings of "sauce for the goose; sauce for the gander" in terms of making companies justify their party political donations, pretty well as the Conservative government forced through ballots of trade unions. I believe that one of the dangers in approaching this Bill is the idea that, "It is now our turn to draw up the rules". If that is the case, we shall never obtain the kind of consensus that the Minister called for when he introduced the Bill.
	On these Benches we give the Bill a broad welcome and broad support, although we make clear that we believe that it is the beginning of a process rather than the last word on the matter. Of course, there are anomalies which must be cleared up. Again, I agree with the noble Lord, Lord Mackay, on the question of part of the Bill being put in place a year before the general election. Perhaps I may help the noble Lord: I calculated 395 days to the general election. However, I am not sure that that will work for this Bill.
	We are dealing with three important areas of politics: how political funds are raised; how they are spent; and how elections and referendums are conducted. As the Minister said in his opening remarks, it is a debate which is as topical as the morning's headlines. The noble Lord, Lord Mackay, referred to the difficulty of filling the post of party treasurer. I believe that we are probably all the poorer without the experience of "Lord Ashcroft of Belize". Perhaps he will join us in time for the Committee stage. If not, perhaps we could persuade the noble Lord, Lord McAlpine, to contribute. Both have considerable expertise.
	We have always considered one of the specialities of this House to be that around us were dotted Members with particular expertise on the matter under discussion. Before the noble Lord intervenes, I recognise that someone who speaks from the Benches of Lloyd George should not dwell for too long on these matters. I believe that that may have been what he was intending to say.

Lord Mackay of Ardbrecknish: My Lords, I was simply going to say that I was under the impression that at least one of his colleagues is, or had been, treasurer of his party.

Lord McNally: My Lords, I shall move on quickly! I believe that Sir Edward Heath and, indeed, the noble Viscount, Lord Cranborne, said all that has to be said on that matter. However, I recommend to noble Lords the article in today's Guardian by the noble Lord, Lord Hattersley. He is not in his place, but then he rarely is. There is no doubt that there is about the noble Lord, Lord Hattersley, the fervour of the born-again radical. Somehow, my complete approval is tempered only by that old Hollywood saying, "I knew Doris Day before she became a virgin"!
	The background to the Bill is that it is part of a whole package of reforms. Having read an article by the noble Lord, Lord Rees-Mogg, in this morning's Times, it is clear that some elements view with disapproval the attempt to bring our politics up to date. However, as the Minister intimated in his remarks, the point is that there was a need to rebuild public confidence in our political system, a need to devolve power from Whitehall and Westminster, and a need to make the systems fairer and reflect more the will of the people. In particular, there was a need to remove the stench of sleaze that had gathered around politics. I believe that today's Bill is part of another building block in that process. In our view, the aim should be to make political funding transparent and accountable. Spending rules should be fair and manageable.
	We should not be setting up a system, rather like some elements of our tax laws, where the challenge is how you get around them. We need a system that is going to be obeyed. I agree with the noble Lord, Lord Mackay, that to achieve that, the system needs to be simple, understandable and usable by people, many of whom are amateurs. It is not just professional politicians that will make the system work, but thousands and thousands of volunteers. If the system becomes too complicated, it will become extremely difficult.
	I can tell your Lordships of my own experience in 1983. I was passing a newspaper stand where the headlines were: "Five candidates to be prosecuted for election malpractice". Having had some experience of these matters I wondered who the fools were who were not able to get their returns in within their expenditure limits. I bought the paper and saw my own name there. The fact is that I had consulted Stockport Town Hall which had given me a figure. I told my voluntary agent that she should return figures accurately and within the figure we received from Stockport Town Hall. Stockport Town Hall had made a mistake. But it was my responsibility, not theirs or even that of my agent. I ended up being interviewed by two policemen from Greater Manchester police about possible election malpractice. The spending limits must be simplified, as the Bill attempts to do, so that volunteers and political innocents, such as myself, do not fall foul of them.
	The other problem is that national expenditure was uncontrolled and it overlapped increasingly with local campaigns. It really did not matter how much I spent in Stockport when the work of the noble Lord, Lord Saatchi, was all over the constituency on national campaign hoardings. Added to that, we now have the massive increase in telephone canvassing, which is very hard to link to any particular constituency. There is an increasing use of the Internet. I am told that at Millbank there is already a special unit gathering Internet names for Internet campaigning. I am sure that the Conservatives have likewise. That kind of new technology campaigning will be difficult to control or account for. Therefore, we must set limits to party fundraising which, once and for all, cuts the umbilical cord between party fundraising and party-political patronage. It offends the general public.
	I say that it is not the end of the matter because I think we shall have to return to it. We have said consistently that state funding is the real way to keep politics clean. The sums mentioned in the Bill for the two major political parties are extremely difficult to raise by means that do not involve either organisations or individuals making donations to political parties which imply some influence-buying.
	If we are to achieve a political system that is truly clean, we need state funding. There has been a degree of hypocrisy regarding state funding, not least among the parliamentarians. They have consistently resisted state funding for the party outside Parliament, and yet been ever ready to extend state funding to parliamentarians through the Short money and now the Cranborne money. They take it for themselves but do not to see it as a logical extension in relation to this matter.
	Short money was introduced because Harold Wilson was determined that not a penny piece of state funding should get to Transport House, which was then under the control of the ever-loyal Mr Wedgwood Benn. Therefore, the Short money scheme was devised. We should try this system of capping and transparency. However, if we really want to clean up our politics, the only way is through a proper system of state funding.
	I wish the electoral commission well. I think this is an important innovation. It must be seen to be truly independent. I query what the Minister said as regards the exclusions that he set out. Outside of a Cistercian monastery, I am not sure who he will find who is qualified to sit on the electoral commission. I see some old friends there, but I have never been as dazzled by the independence of the Cross Benches in this place as some people purport to be. I do not believe that political eunuchs are particularly well qualified to take on the particular roles set down for this commission. After all, we have had some fairly good examples in the past of ex-MPs becoming extremely good judges. Furthermore there are those who were active in political parties who have become very good magistrates. The point I make is that being active in party politics should not be a disqualification, as the Minister seemed to be implying, from taking on a role that requires independence and judgment. I think that that is an unnecessary debarment of extremely worthwhile talent, although I take the point that "cronyism" has to be avoided as well.
	I look forward to the debates on how we organise our referendums. I see a few familiar names on the speakers' list today who might be examining this. My own suspicion is that even if the noble Lord, Lord Stoddart, were allowed to count every vote personally, he would still object to the outcome of some referendums. But I look forward to his speech.
	We shall take up a number of matters in Committee. The Minister indicated my party's continuing concern about federalism, and we welcome the constructive attitude he has taken in relation to that. We are still worried about the overall expenditure limits allowed by the Bill, although they are less than the £28 million spent by the Conservatives, the £26 million spent by the Labour Party and the £3 million spent by the Liberal Democrats--that was not mentioned--at the last election. But it is still an enormous amount for the Conservative and the Labour parties to raise. We are also concerned that the by-election campaign expenditure limit has been very high. I return to a point I made earlier, and I believe it was made also by the noble Lord, Lord Mackay. We must remember that, particularly in relation to smaller parties, one is dealing with volunteers and with very small organisations. Therefore, we should not impose too rigorous legal requirements upon them. Mention has also been made of the need--and we shall deal with this in Committee--to look at the qualification for overseas voters.
	I was interested to hear what the Minister said about exhibition stands at party conferences. From my experience, I have seen a growth of trade fairs around the party conferences which are now major sources of funds for all the political parties. That is something which may need to be looked at so that funds are not dog-legged through large charges for exhibition stands to overcome the other restrictions.
	I look forward also to our discussions about third party campaigning. I believe that there are dangers for democracy if we do not look carefully at and perhaps learn something from the American experience of how very well-funded, single-issue pressure groups can distort the electoral process. That needs to be looked at. We must also take on board the points made about the capacity of organisations with an interest in the outcome of a referendum trying to distort the process.
	In the end, from these Benches, we welcome the Bill because it takes us in the direction of greater fairness and transparency in relation to both the funding and organisation of political campaigning. It is a beginning, not an end but, as such, we support it.

Baroness Gould of Potternewton: My Lords, like the noble Lord, Lord McNally, I look forward to the Committee stage of the Bill which I believe will be lively. But I hope that, as in the other place, we can proceed on a consensual basis and that we do not get so bogged down in the detail that we lose sight of the principle of the Bill.
	It seems to me that the Bill is an important milestone in the development of our democratic institutions. It will be the first time that political parties have been subject to statutory regulation. We should offer our congratulations to the Neill committee on its work in making the Bill possible. We should congratulate the Government on following through many of the recommendations of the Neill committee. As most of those recommendations were ones I suggested in my evidence to the Neill committee, I feel particularly strongly about that.
	There is a powerful democratic and ethical, as well as constitutional, case for the financial affairs of political parties being open and accountable. A vacuum of legal principle has led to a level of disquiet about the financial affairs of political parties. I hope that this new era of openness, transparency and accountability will help to restore the electorate's faith in the political process. That is a faith which we have tried to uphold historically.
	From the early days of universal franchise, it was seen as an essential principle of democracy that economic power should not be able to buy political power: from the passing of the Secret Ballot Act 1872, which protected voters from intimidation, to the introduction of the Corrupt and Illegal Practices Prevention Act 1883. That Act remains the basis of our election law. But it takes into account only the expenses of the candidate and the election agent. That was understandable at the time because political parties barely existed outside the constituency or the parliamentary caucus. But things have changed. There have been dramatic changes in campaigning techniques over the past 120 years. Political parties have become more dominant. There has been much more control from the centre. That created an anomalous situation which has to be rectified by the introduction of a level playing field for national expenditure at general elections. It is a great pity that we have had to wait so long to do that. I shall return later to that point.
	It is always gratifying when something for which one has argued and campaigned comes to fruition. The Labour Party was the first political party to promote the case for an independent electoral commission. It is encouraging to see the Conservative Party now converted to that view. It is better late than never. The party was certainly opposed to it in government, and I have the evidence to prove it.
	I understand that it is hoped that the electoral commission will be in place before the end of this year. It is crucial that a speedy timetable is adhered to because the work and functions of the commission underpin all that follows. It is the bedrock on which the Bill is based. As there is such general consensus on the establishment of a strong, independent commission, there is no need to argue the case for supporting--at least in principle, if not in detail--Part I of the Bill.
	It is important that the commission is seen to be open and transparent. The accountability and regulation applying to the political parties must apply also to the commission. Its independence is crucial to its successful operation.
	As the Minister said, the Bill identifies clearly the commission's independence from the government of the day. The arrangements to be followed are those which apply to the National Audit Office, and I do not believe that anyone can say that that is controlled by government. It will be directly accountable to Parliament, and the distinctive machinery for appointing members of the commission and for setting its budget will help to reinforce that independent status.
	I have a small problem with absolute independence, as has the noble Lord, Lord McNally. I believe that the commissioners must have a detailed understanding of the reality of running elections locally and running political parties nationally. The commission's many functions rightly cover all aspects of political party and election activity; that requires a real level of expertise, experience and an understanding of the political process. The issue is important because I do not believe that there will be time for a learning curve. The commission's first actions will determine its success for the future.
	It has been suggested--and no doubt the claim will be made again today--that the commission could become merely an advisory body or that it will be partisanly packed. That is a complete misinterpretation of the provisions in the Bill in respect of the commission's membership and functions. Representation on the Speaker's Committee, which will oversee the work of the commission, has also been challenged by the suggestion that it will be dominated by senior government appointees. Those seem to me not very valid attempts to challenge the conduct of referendums as proposed in Part VII prior to the referendum on British entry to the European single currency. Of course, we must be concerned that there is independent oversight and monitoring of the conduct of all referendums, not just that one, and that both sides of the argument have a fair opportunity to put their case to the voters. I believe that the Bill adequately meets both of those requirements.
	The commission's structure and functions in respect of referendums fully satisfy the views of the Nairne commission, of which I was a member, and provide the necessary guidance on organisational, administrative and procedural matters relating to the holding of a referendum. Like the noble Lord, Lord Mackay, I look forward to having discussions about the detailed funding of referendums in Committee and at future stages.
	However, I make one point today on the wording of the question, which we discussed in the debate initiated by the noble Lord, Lord Hayhoe. It is essential that the question should be short, easily understood, objective, fair and designed for only two possible answers--"yes" and "no". It should not be multi-optional nor open to alternative meanings. I hope that the commission will advise the Government on that issue.
	I make one further point on the role of the commission. It is right that the registration of political parties now comes under its umbrella, even though the Bill was passed only two years ago, and that the process of registration is no longer voluntary. However, I wish that the Bill had gone further. I believe that registered parties should have to prove that they have a membership of a certain level and that they are properly constituted bodies.
	The constitutional logic behind public disclosure laws is that political corruption thrives on secret financial gifts. In exercising their vote electors have a legitimate right to know who is financially underwriting the political parties they are being asked to support. The public scrutiny of large donations by permissible donors will give that right, eliminating, as it does, donations from secret sources, blind trusts, foreign donations and loans which suddenly become donations. It is right also that donors should have to be registered electors. I might go further and suggest that they should be resident in the UK.
	Donations from institutions must be treated differently from those of large individual donors. Since 1913, trade union funding has been controlled by legislation, added to by further regulation in 1984 and 1993. In 1989, your Lordships' House interestingly passed an amendment to put donations by companies on much the same footing as donations from trade unions. The amendment was rejected in the other place. On this occasion, its Members have finally been persuaded of the unfairness of the current position. However, one aspect of this part of the Bill requires further examination. The subject may be covered by the Minister's reference to exhibitions at conferences. Currently, there is no provision for small-scale sponsorship. While retaining the principle, there could be a case for setting a de minimus limit which would be of benefit both to companies, as the CBI has suggested, and to political parties.
	I turn to expenditure. I have a number of queries, although not, I hasten to say, concerning the £20 million maximum limit on national expenditure, which was another of my suggestions to the Neill committee. I wish to probe the requirement in the Bill that political parties nationally declare all expenditure regionally and locally not covered by the current statutory requirements in the RPA as part of the £20 million. It is difficult to understand how that provision will work in practice. Clarification is needed. For instance, what is the position of a national party which may unknowingly exclude from its returns an item of local expenditure which should have been included but could not be because the party knew nothing about it? We need to see how such a situation would be covered. Equally, from my experience of over 40 years as a party organiser, both voluntary and paid, and having spent time in police stations, I believe that Schedule 7, outlining the list of accountable expenses, is too detailed and will be rather difficult to enforce. I am uncertain also how that detailed list will allow the commission to prepare a code of practice as laid down in paragraph 6(1)(a) of the schedule. I hope that the Minister will agree to further discussions on both those points. They are important for both national and local treasurers.
	My main concern, however, relates to there being no provision in the Bill to limit third party expenditure at local level. I was pleased to hear my noble friend say that an amendment is to be made to the Bill to cover that situation. I do not understand why the provision was dropped from the draft Bill, but I am pleased that it is coming back. Without such a provision, third parties would be free to spend as much as they liked in a constituency campaign for or against a candidate. Not only were vast amounts of money spent in the Ayr by-election, to which the noble Lord, Lord Mackay, referred, but it is reported also that the same source of funding is attempting to spend £1 million on a referendum on Section 28 in Scotland.
	It is not the issue that is relevant, but the example illustrates that vast amounts can be spent to influence local opinion. If that money was spent during an election, such action would seriously erode the concept of equity between the parties and corrupt the election process. There is also the whole question of Precious Life in Scotland, now being funded by international donations from all over the world. We cannot say that it should not receive money from all over the world, but we must regulate what it can spend during an election period.
	I have one point for clarification on the trade unions. It is not, however, the point made by the noble Lord, Lord Mackay, based on a rather selective reading of the Neill report. Clause 83(2)(c) cross-referenced with Clause 49(2)(b) implies that trade unions are unincorporated associations. My understanding is that under trade union legislation, they are classified as quasi-incorporated organisations. I do not know whether I am right, but if I am, the definition should be the same. Many points will be raised in Committee, not least the question of whether the formula in relation to overseas voters is right or whether we should be looking for differing views. As I said, I hope that we can go through the Bill on a consensual and friendly basis because it provides the foundations for an open and transparent system of party funding. It provides the foundations for the fairest and most equal elections and the best enforced election campaign regime. The Bill is long overdue and deserves support.

Lord Howe of Aberavon: My Lords, I hope that I may be forgiven if, not for the first time this Session, I beg absence from the end of the debate, because I have a longstanding commitment to entertain the Minister for Justice of the People's Republic of China on his arrival in this country. I daresay that our discussion will not touch upon items of the kind before the House in this legislation.
	I speak with great diffidence, particularly at this stage in the debate, speaking immediately before the noble Lord, Lord Neill, and immediately after the noble Baroness, Lady Gould, both of whom have expertise far beyond my wildest dreams. I cannot plead any such thing, nor can I plead any recent coalface experience, although I can offer some other insights.
	My position corresponds in a strategic sense closely to that of my noble friend Lord Mackay of Ardbrecknish and the noble Lord, Lord McNally; a Scotsman and an Irishman followed by a Welshman, dissenting on the same point. My experience goes back a long way in the sense that as a Law Officer I had to deal with the enforcement of election law in the early 1970s, when we were still quite content to rely upon the 1883 legislation. We had to give consent to prosecutions. They were extremely rare events and I appreciate that the world has moved on since then. I want to speak much more about my experience at the sharp and modest ends of the coalface to which noble Lords have referred; at constituency level. I am concerned that in the strategic sense the scope, intrusiveness and detail of this legislation go beyond what is sensibly manageable.
	Although half of my dozen election campaigns were undertaken in the lush comfort of Surrey, the other half-dozen were undertaken in more arduous settings: two in a marginal seat on Merseyside; two in my home seat in South Wales; and two in a different capacity in Poplar. It is with the concept of an accounting unit as set out in Clause 23 as applied to a minimum recordable donation of £200 that I am concerned, particularly with the detail of surveillance contained in the Bill.
	It was difficult, even in those unregulated days, to find anyone able or willing to act as treasurer. How much more difficult will it now be when this legislation will be judged not simply by the particular provisions brought to bear on any action, but by the fact that it is contained in a Bill of 180 pages with 19 schedules, one of which is five pages long, listing 75 possible offences, 30 of which are punishable by up to one year in prison? It is that overwhelming, comprehensive set of provisions which will be the worry when the legislation comes to be applied. It will be seen as a serious legislative intrusion into the arteries, and indeed the capillary tubes, of democratic life, at a time when the lifeblood of democracy seems to be coursing ever more slowly and in ever shorter supply. I am deeply concerned about legislation, however well considered, on that scale, passed at such speed. The noble Baroness, Lady Gould, talked about the need to get the legislation under way quickly and I understand why that is part of the aspiration, but I am concerned that we place too much faith in the legislative process.
	In my evidence to the first meeting of the Nolan committee, presided over by the noble Lord, Lord Nolan, I said:
	"My first"--
	and most important--
	"point, please do not expect too much by way of salvation from detailed legalistic provision ... One can too easily be led to think that things have been rightly done by compliance with a whole series of rules rehearsed by rote, so I think it is very important not to go too far down that road".
	I make that point with due modesty because I am not without experience of the disillusionment that follows the enactment of comprehensive and swiftly considered legislation. I plead guilty to introducing prices and incomes legislation; the first Bill on consumer credit; one of the early Bills on the regulation of insurance companies. I also plead guilty to faltering attempts to amend company law which were subsequently taken up by the noble Lord, Lord Shore of Stepney, and, in the area of industrial relations, to a comprehensive attempt to resolve all our problems at speed, which, even after much consideration, was not wholly successful.
	I do not mean to be frivolous by suggesting that in the end the tempo followed, over a series of Parliaments, by my noble friends Lord Prior and Lord Tebbit produced a more durable and a more effective solution and a solution with more consensus than the alternative. But, broadly speaking, consensus now reigns on that.
	By all means let us proceed to establish the electoral commission, but I am worried about the possible consequences that may face such a body if it is so overloaded with a burden of obligations to be performed at high speed that they may be incapable of being fulfilled. Once again, we have the experience of similar situations in relation to the Passport Agency, asylum seekers or the Criminal Cases Review Body. In relation to each of those, quite suddenly huge waiting lists appeared and there were inadequate resources with which to deal with them.
	I hesitate to quote again from a learned judge who was quoted only a week or two ago by the noble Lord, Lord Lester, but he deserves to be quoted. In 1944 Judge Learned Hand of the United States said in Central Park in New York:
	"I often wonder whether we do not rest our hopes too much upon constitutions, upon laws and upon courts".
	He said that a society that needs a court to save it "no court can save".
	It is not because, as a lawyer, I shrink from reliance on the law where it is appropriate, but I believe that in some important matters it is best to make progress by agreements outside the law, agreements of a self-policing kind. In the 1920s a Liberal Peer, Lord Moulton, said:
	"There are three great domains of human conduct. The first is where our actions are limited or forbidden by law. Then there is the domain of free personal choice. But between these two is a third domain, that in which there is neither law nor unfettered freedom. This is the domain of 'obedience to the unenforceable', where people do right although there is no one and nothing to make them do right but themselves".
	I may be naive to quote that, but I believe that that thought is worth bearing in mind, as we develop regulation of a kind that is necessary in an extremely sensitive area.
	I offer two reasons for being so naive. The first is that our past experience often leads us to conclude that even without detailed legislative interference the truth will out. As some lawyers say, "even in an affidavit, the truth will out". The fact is that the circumstances surrounding contributions to my own party by Mr Asil Nadir and those to the Labour Party by Mr Bernie Eccleston saw the light of day in advance of and without the need for legislation. The parties themselves then changed the rules so as to deal with the problem.
	In a wider area, on the regulation of advertising by tobacco companies--the noble Lord, Lord Harris of High Cross, will be glad to hear--I found it difficult to explain this to his friend Mr Jacques Delors. We have been able, in this country, to regulate advertising of that kind without any legislation, but by a code drawn up between the parties that may or may not subsequently need legislation. Self-policing of the right kind can often be as effective because we are capable of developing, even in political parties, a sense of guilt.
	That is what concerns me in this legislation. In truth the concern, the sour taste in our mouth, as the Minister said, does not arise because of our fear of corrupt wickedness on the part of the treasurer of the Birkenhead Conservative Association, or the Poplar Labour Party. Dismay and shock are not caused by donations of £200 from people at that level. I regret that the real concern is much more often at a higher level. Whether the concern is justified, the concern about the treasurer of our own party has caused concern among the former leaders of my party in both Houses. So it cannot be dismissed as mere triviality. It is related to these issues.
	Similarly, there is the recent accession to membership of this House of a group of supporters of the Labour Party. No doubt they too have many achievements to their credit, but the one qualification that the public perceive of that self-serving mass baptism is the scale of the substantial donations made by many of them--although not all--to the Labour Party.
	This huge legislative mountain--I wish my noble friend Lord Mackay of Ardbrecknish and his colleagues well as they plough their way through it in Committee--may well suffer from over-intrusiveness, over-prescription and over-detail, and, I add from bitter experience, from the inclusion of errors and mistakes, particularly if it is driven through the House at speed. To deal with the matter in that way adds little credit to our legislative process.
	That is my main concern. What could be an alternative approach to some aspects of this? I mention two points. First, I am not sure that we are right, as the Bill provides, to concentrate so much on the regulatory process of expenditure as a whole. Are there not other ways of limiting the demand for political money as well as doing so in the aggregate sense? In this country, by prohibiting paid-for advertising and propaganda on broadcasts on television or radio, we have already achieved what our American friends have not. We do not have to face that huge level of expenditure, but the Americans do. Is it unthinkable that we should adopt a similar approach to the strident, sight-bite, over-simplification of posters and newspaper advertising? That is not much more sophisticated than some of the sound-bites that one hears on American broadcasting channels. Advertising of that kind on posters and on campaigns cost 50 per cent of the money spent by my party at the previous election and a little over 40 per cent of the money spent by the Labour Party.
	My second proposal which does deserve support, sadly the one proposal put forward by the noble Lord, Lord Neill, and his colleagues that has so far been rejected, is for tax relief for political donations. At a time when the Chancellor is liberalising the provision of tax relief for charitable donations, which is to be respected, the concept of doing the same for £4 million in relation to political donations seems to me to be entirely attractive and cannot be dismissed on budgetary grounds.
	Perhaps I am revealing a previously undisclosed secret, but one surprise that met me when making out my first Budget was that the size of the public sector borrowing requirement had to be measured to the nearest £0.25 billion. In that context I do not believe that £4 million, or even £5 million or £6 million, would be too much to begrudge.
	Those are my two positive points: consider the prohibition of poster advertising and newspaper advertising; accept the recommendation of the Neill commission for tax-free charitable contributions; and reflect seriously on whether the other detailed and intrusive provisions to which I have referred will encourage or discourage participation in the political process at a time when we badly need it. Is it really necessary, even in today's sour atmosphere--as the Minister said--to proceed on the assumption that the mischief that this legislation is aimed at is to be found among the foot soldiers of the democratic process at constituency level? The commission, and I hope the House, if it gets that far, will consider carefully whether these ever-forward-rolling frontiers of legislation may not be restrained. We can learn more by proceeding step by step.

Rover

Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall now repeat, in the form of a Statement, the Answer to a Private Notice Question given by my right honourable friend Mr Stephen Byers, the Secretary of State for Trade and Industry in another place. The Answer is as follows:
	"There are thousands of individuals and their families who have been affected by the decision taken by BMW in relation to Rover. Whole communities will also have to deal with the consequences. It is these individuals, their families and communities, that are the focus of our efforts.
	"On 16th March, BMW's Supervisory Board announced that it had entered into an agreement with Alchemy Partners to negotiate for the disposal of Rover cars within six weeks. The following day it announced that the heads of agreements had been reached with Ford for the sale of Land Rover at Solihull. On the same day I established a task force involving all the partners in the areas most affected by BMW's decision to advise me on how we can support those affected.
	"This task force is led by Alex Stevenson, who himself has personal experience as a former Rover director. The Longbridge Task Force has three objectives: first, to assess the impact of any reduction in activity at Longbridge on the people, businesses and communities of the region; secondly, to advise on the public and private resources that are already available to help to deal with these consequences; and, thirdly, to draw up proposals for action by local partners and by central government.
	"The task force is working hard on an interim report to be submitted in the next three weeks. I have asked the task force to take a wide remit, looking at what measures it will best use to regenerate the area and replace economic activities lost at Rover. I have committed £129 million to support the recommendations of the task force. It is looking at everything, including the implications to the supply chain and what we can do to support it; at training; and at infrastructure, including transport links. The task force has already issued a questionnaire to 5,000 companies, including 450 direct suppliers of Rover, to quantify the scale of impact on the supply chain. It will feed its recommendations in to me.
	"At this stage, I am not ruling anything out. I shall await the report. I can, however, say that I will do everything I can to encourage job creation and economic activity in the area, not only stepping up my department's action on attracting new inward investment to the area, but also by supporting the development and growth of home-grown companies.
	"My right honourable friend the Secretary of State for Education and Employment has taken action to help those affected by any redundancies at Longbridge. The Employment Service has established a unit to offer help and assistance. A job shop is in place at Longbridge to help those workers affected by any job losses. Anyone made redundant at Longbridge will qualify for fast-tracking of benefit claims, early access to training, and employment service programmes such as New Deals, and job finder services.
	"The task force, with the job shop, has launched a freephone advice hotline supported by BT to advise supply chain companies with difficulties and to pool information on vacancies presently available in the car industry. The local training and enterprise council is also looking at specific training to meet the needs of those affected.
	"On 23rd March, I met with BMW. We agreed that we now need to look forward and plan ahead for the future. During our discussions BMW agreed to minimise the losses of jobs as the result of its decision. I explained to BMW that we felt it was important that it should co-operate with the task force; BMW responded positively to this proposal.
	"Over the next few weeks our objective is to manage the changes that will flow from BMW's decisions in a way which minimises the number of jobs to be lost, whether directly or indirectly, in the supply chain or dealership network. We will also need to put in place a programme of economic regeneration and job creation.
	"When I met workers on the assembly line at Longbridge the day after BMW's decision, their anger and shock was clear, but so was their commitment and strength of character. The West Midlands has overcome some difficult times in the past. I am confident that it will do so again. On behalf of the Government, I can say that we will do all we can to ensure that together we can meet the challenges that lie ahead".
	My Lords, that concludes the Answer.

Baroness Miller of Hendon: My Lords, I thank the Minister for repeating as a Statement the Answer previously given in the other place. I speak as one who, when I became a Member of your Lordships' House, bought a Rover as I felt that it was appropriate that I should own a British car, to find only a few weeks later that Rover had become part of BMW. Now we find that a reputable British marque is--not to put too fine a point on it--being discarded, with the tragic results of losses of jobs for thousands working at Rover, as well as for those working in the component industries.
	We naturally welcome the creation of a task force to review the consequences of the sale of Rover, but would it not have been more effective if such contingency work could have been set in hand last December when the threat to Longbridge first became clear to the DTI? Or do the Government claim that Ministers were never aware that there were problems at Longbridge--something that would be quite extraordinary on their part? If they were aware, will the Minister tell the House when Ministers first concluded that Rover/BMW as a whole might be in some difficulties?
	If, as the DTI claims, Dr Milberg said last December that difficulties only surrounded investment in the R30 car, did the DTI step up its efforts at that point to secure the grant which might have saved this part of the project? If so, when, and how?
	I understand that, several weeks ago, the German magazine Der Spiegel carried an article that BMW itself was in difficulty, solely because of Rover, and that it was contemplating ditching it. If that is the case, can the Minister say whether we employ a commercial attache in Germany? Would not part of his duties be to inform the Government in this country of those matters? Would not the most sensible course now be to allow the Permanent Secretary at the DTI to publish the minutes of the discussions, including notes of telephone calls between Ministers and BMW, in order to clarify this matter? We could then dispose of all these claims and counter-claims.
	The future of many thousands of jobs is now at stake. That, as the Statement quite rightly says, must be the matter that is uppermost in all our minds. There has been much blaming of BMW, but does the Minister agree that jobs in British industry will not be saved by vilifying foreign investors, given that inward investment is hard enough at this time because of the weakness of the euro?
	Can the Minister tell the House what is being done to secure an alternative buyer to Alchemy for the Rover plant? Can he also tell us the latest state of play as regards the sale of Land Rover to Ford? Finally, will he undertake to come to the House and to allow a debate in government time when the report of the task force that he has just announced is received?

Lord Razzall: My Lords, like the noble Baroness I, too, should like to thank the Minister for repeating this Answer as a Statement. I believe that this is the first time that Government Ministers have made a Statement on developments at Rover. For that reason, I shall be grateful if he will use this opportunity to answer one or two questions covering wider areas than those set out in the Statement.
	First, will the Minister confirm the Government's opposition to the expressions of xenophobia, and in particular the anti-German feelings, with which this debate has been conducted in certain sectors of the press? Will he further confirm that the Government have no part in that view and that a country that is obviously so dependent on foreign investment must condemn views of that kind whenever they are expressed and by whomever they are expressed?
	Can the Minister also take this opportunity to agree with me that the approach taken by the Tory Opposition to the issue, which has been demonstrated by the words of the noble Baroness this afternoon, does no service to the employees of Rover, in particular those at Longbridge? A kind of, "Who said what to whom and when?" amateur detective story approach tends to mask the seriousness of the issues that are at stake here. One does not have to be a "Brain of Britain" or even a winner on "Who Wants To Be A Millionaire?" to realise that a company that has been losing over £1 billion--as BMW was losing on its UK investment in Rover--must at all times consider the future of that investment?
	Furthermore, it is also apparent to anybody who has been involved in these issues that until a final decision is taken by the management of a particular company, it will always say that no decision has been taken. Indeed, perhaps the Minister will confirm that as late as the end of February the top management of BMW was saying at the Geneva Motor Show that it had absolutely no intention whatsoever of closing down Rover or withdrawing its investment from that company. So will the Minister please confirm that the line which is being taken by the Tory Opposition is an irrelevance to the real issue?
	Also, will the Minister confirm that the real problem, as the Labour Party and the Government will not say and the Tories cannot say, regarding what has happened at Rover, is that our currency has for far too long been significantly overvalued against the continental currencies? Honda has said it this week; Ford has said it this week, as have representatives of the CBI. It will not come as a surprise to your Lordships' House that we from these Benches would regard the only significant solution to such a problem recurring--indeed, had the appropriate steps been taken earlier perhaps this could have been avoided--is entry into the euro at the appropriate exchange rate. Will the Government now accept that the only way of preventing catastrophes of this nature is for them now to give a clear route map to entry into the single currency, and not something of the micro proportions which the Treasury is now putting in place? Can they give a clear announcement of a clear plan, which will obviously include the whole process of entry into the single currency, including how the currency will be managed "down" during that period?
	I said that the Labour Government will not say that this is the real background to the Longbridge tragedy. Does the Minister accept that the Tories cannot say it, because of course they regard the euro debate as the issue that will win them next election? Finally, will the Minister go so far as to say that when the Leader of the Opposition travels around the country on the back of a lorry, whipping up opposition to the euro, he is playing with the livelihood of the workers of Longbridge?

Lord McIntosh of Haringey: My Lords, having listened to the debate in another place on this PNQ, perhaps I may say that I am grateful to noble Lords opposite at the very least for the reduction in decibels on this occasion and in this House.
	The noble Baroness, Lady Miller, says that the Rover marque, of which she is a loyal adherent, or has become a loyal adherent since coming to this House, has been discarded. However, the R75 is still being made in Cowley and other Rovers are still being made in this country. I have to say that BMW is a significant player in the British motor industry, and its continued contribution to that industry should not be undervalued.
	The noble Baroness repeats the canard that in December we were told that there was a threat to Longbridge. She clearly did not listen to my right honourable friend when he quoted Professor Milberg precisely. He said:
	"I never said that the BMW group would have to reconsider investment at Longbridge".
	Indeed, as the noble Lord, Lord Razzall, has reminded us, Professor Milberg said at the Geneva Motor Show on the 28th February that they were--and I quote:
	"serious and steadfast in our commitment to Rover at Longbridge".
	So the suggestion that is being made--that we were aware of a threat to Longbridge which was positively being denied by BMW and that we should disbelieve it--is not particularly plausible. Indeed, I agree with the noble Lord, Lord Razzall, that there is not much to be gained from this sort of amateur detective work on what has happened in the past.
	Nevertheless, the Secretary of State has made it clear that, subject to commercial confidentiality, which in very large part depends on how much BMW is willing for him to say, he will make available to the Trade and Industry Select Committee all the documents that he can, not just when he meets the committee on Wednesday, but before then. Our commitment to open government in this respect is unimpaired.
	The noble Baroness asked whether we should not have stepped up our efforts to secure the grant from the European Commission. Yes, it has been a problem that when you use the Article 88(2) procedure it takes a long time to get the grants. That is because the European Commission is now open: it seeks to make its thinking known to allow for possible objections. However, we are assured by BMW that this was not a significant issue in its decision.
	The noble Baroness also asked whether we would stop vilifying foreign investors. We never started. The noble Lord, Lord Razzall, is quite right: we have always rejected any suggestion that we should indulge in the kind of xenophobia which regrettably has been seen in some of the tabloid press in recent weeks in this country. It is not in our interests, in the automobile industry or anywhere else, to attack those who invest in this country. It is in our interests to see that such investment is well justified and that other people are encouraged to come and invest in this country as a result.
	The noble Baroness asked whether there was any alternative to Alchemy. We do not intend to undermine Alchemy at this time. That is the deal which is being discussed with BMW and we do not propose to intervene. So far as Ford and Land Rover are concerned, I understand that a memorandum of understanding has been produced and I am not aware of any setback in the negotiations.
	As to the issue raised by the noble Lord, Lord Razzall, about the overvaluation of the currency, we have always recognised that for manufacturing industry in general the strength of the pound in relation to the euro is a difficult problem. However, we simply cannot accept that using the magic wand of declaring entry into the euro straightaway would somehow resolve these problems so that the currency would go down and our interest rates would converge with those in euroland. It is a very nice thought and it would be lovely if it were true, but I do not think that any serious economist thinks that is the case.

Lord Razzall: My Lords, if I may intervene, I did not actually say that. I did not say that.

Lord McIntosh of Haringey: My Lords, the noble Lord suggested that what has happened is due to our failure to do what his party has been arguing for over a long period, which is to make an immediate commitment to the euro, regardless of economic circumstances. Perhaps he has not said it on this occasion, but I can assure him that members of his party from the Benches from which he speaks have made that suggestion on many occasions in recent weeks; I have been required to answer them. I can assure him that that is their view, but I do not believe that there is any magic wand or any "quick fix" of that kind which is available.
	The noble Baroness asked whether it would be possible to find government time for a debate on this issue. That, as she knows, is a matter for the usual channels.

Lord Islwyn: My Lords, first, will the Minister appreciate that I have no wish to vilify foreign investors, but what bothers me is the fact that 22 miles away from Longbridge, at Ryton outside Coventry, Peugeot, the French company, is making a huge success of its operation. What is more, it is drawing from roughly the same labour pool. Have the Government considered this issue from that point of view?
	Secondly, I should like to ask the Minister whether any consideration has been given by the Government to taking the Rover concern into public ownership.

Lord McIntosh of Haringey: My Lords, in relation to my noble friend's first question, we are glad to recognise the success of Peugeot and its 206 line at Ryton. We are pleased that that particular foreign investment is going well. In response to my noble friend's second question, I saw the Socialist Worker-inspired posters at the demonstration--a marvellous, clearly well-supported and deeply-felt demonstration for which I have nothing but admiration. But when the Socialist Worker takes it into its head to demand re-nationalisation of Rover, does it carry with it the obligation on ordinary people in this country to buy Rover cars?

Lord Marsh: My Lords, is the Minister aware that when the Nissan project team arrived in this country some years ago, it took a conscious decision that if it decided to invest in the United Kingdom it would not do so on a site within travel-to-work distance of any British car company? Is the Minister aware therefore that the plant was staffed overwhelmingly by ex-miners and not ex-car workers? Does the Minister further accept that the productivity today of Nissan is some 300 per cent in excess of that of much of the British motor car industry? The idea that this is a question of the strength of sterling and entry into the single currency is grotesque. Does not the Minister accept that the real problem is massive over-capacity in the European car industry which successive governments in many countries have tried to meet with massive state subsidies and achieved nothing other than to prolong the agony?

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Marsh, appeared to be approaching his first question rather obliquely, but I suspect that he was saying that British car workers are no good and one could do better employing ex-miners.

Lord Marsh: My Lords, I was saying nothing of the sort. British workers and British managers made Nissan in the UK the success it is. I am simply saying that the problems of Longbridge go back a long way.

Lord McIntosh of Haringey: My Lords, I do not accept what the noble Lord is saying about the workers at Longbridge. Only to a very minor extent is productivity in the motor industry the reflection of militancy many years ago. Productivity in the motor industry is largely an issue of capital and management. Given the right management and the right capital, I am convinced that the workers at Longbridge are the equal of any in the world and that they continue to convince the world of that. I would not wish anything to be said from this Dispatch Box disparaging the workers at Longbridge.
	In relation to the broader issue raised by the noble Lord of over-capacity in the car industry, that is the nature of capitalist production. When there is a threat of over-capacity we have to make better cars and sell them better. That is the solution not just for Rover and BMW, but for all car manufacturers.

Baroness O'Cathain: My Lords, I declare an interest as a former employee of the British Motor Corporation and also a minor pensioner of the Rover Group. The Minister opened with the statement that houses, people and whole communities will be affected. The grief that will arise from this situation is significant and I hope that your Lordships' House will not bat such words as "xenophobia" and so forth across the Chamber.
	I want to ask the Minister two questions. I believe that sums of money were committed to the Rover plant at Longbridge, though they have not yet been paid over. In order to get something out of this wreck and as a lesson for the future, if government money is likely to be committed to a project, should not a working party be set up between the members of the company and people from the DTI? An ongoing investigation could therefore take place into what is happening in the plant. If some of our senior civil servants who are well skilled in getting to the bottom of these problems had been involved with people from BWM, perhaps the shock would not have been so severe and some action might have been taken.
	Further, does the Minister have any firm views as to how the Government will help with the dealership network? That is in total disarray. People are talking about Alchemy buying the site and continuing some production, but the dealer network is in a serious condition and the ripples from Longbridge are spreading throughout the country.

Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady O'Cathain, asked, first, about government money. It is true that a total of £152 million was to be made available to Longbridge, of which £129 was government money. The rest was to be raised locally. As the Statement says, that money is to be made available to the task force to deal not just with the social problems in the community, to which she rightly referred, but also any prospects there may be of reviving or continuing car manufacture at Longbridge. It cannot be assumed that it is available to Alchemy because that is now a separate deal.
	The noble Baroness asked also whether a working party should be set up to bring together the company and the DTI. That is exactly what the task force is doing. Because BMW agreed to participate in the work of the task force, that company is now involved. Central and local government and agencies in the area are also involved. So the task force is doing what the noble Baroness asks us to do, and more.

Baroness O'Cathain: My Lords, my point was that it should have been done beforehand. Doing it now is rather like shutting the stable door.

Lord McIntosh of Haringey: My Lords, I indicated the extent to which, only one month ago, BMW was indicating its steadfast commitment to Rover production at Longbridge.

Lord Hoyle: My Lords, having seen the concern about their jobs of the 80,000 people in Birmingham on Saturday, I ask my noble friend whether he agrees that Alchemy, a venture capitalist with a short-term interest, is not the right company to be taking over at Longbridge. Can he say what the Government are doing to find someone more suitable to take over the factory and preserve jobs?

Lord McIntosh of Haringey: My Lords, my understanding was that the figure was 100,000 and not 80,000 people, and all credit to them. It was clearly a magnificent demonstration of solidarity. But it would not be appropriate for this Government to undermine the deal which is in negotiation between Rover and Alchemy, or to describe Alchemy in particularly pejorative terms. If it can be made to work and Alchemy intend to preserve jobs and car manufacture, that may be better than nothing. At the moment, that is what is on the table.

Lord Clark of Kempston: My Lords, is the Minister aware that the general public will welcome his statement that there is to be no nationalisation of Rover or any other car manufacturer, particularly in view of the taxpayers' experience with British Leyland? Secondly, the general public will be pleased to hear the Minister say that the introduction of the euro is irrelevant in relation to this problem. However, perhaps I can go back to December of last year when pointers were given to the Government. If action had been taken then, contingency plans could have been started in December rather than in March when the final decision was made. That is what is confusing the public. If BMW is not telling the truth, why cannot we do something about it?

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Clark, puts words into my mouth which I did not use. I said that nationalisation of Rover was not a possibility. However, that is not to say that public ownership in itself is always to be deplored. The second point that the noble Lord made is just plain wrong. I did not say that the euro was irrelevant; indeed, Professor Samann himself said that it would have been easier for BMW if we had already been in the euro. You cannot say that it is irrelevant. What I rejected was the rather "quick fix" proposed by the noble Lord, Lord Razzall. As to the pointers in December that the noble Lord, Lord Clark, refers to, I have already quoted the statement of Professor Milberg which gives the lie to what the noble Lord, Lord Clark, says. I have nothing further to say on that matter.

Lord Stoddart of Swindon: My Lords, does my noble friend agree that it is not xenophobia to criticise a foreign firm which failed properly to consult its workers about an action which was a calamity for them and their families and, indeed, the area in which they live? Will my noble friend confirm that the firm did not make proper use of the consultative council machinery which was available to it? I hope that my noble friend will agree that it is not xenophobia to criticise a firm for not doing what it properly should have done. Will he also confirm that it is not the appreciation of the pound against the euro which is at stake, but the depreciation of the euro against the pound? Perhaps he will ask the noble Lord, Lord Razzall, whether he would go into the euro now at the rate of 3.20 marks, because we would not be able to devalue and we would be left with the present exchange rate. Finally, will my noble friend say what is the total number of jobs that are at stake as a result of the action that BMW has taken, both in the car industry itself and in associated industries?

Lord McIntosh of Haringey: My Lords, my noble friend protests too much about xenophobia. I have not used that word except in responding to the noble Lord, Lord Razzall, when I denied that we were xenophobic about the foreign car industry. We are disappointed about what has happened. The Secretary of State said in another place an hour or so ago that we were badly let down by the lack of consultation and the speed with which BMW came to its decision. That is not xenophobia. My noble friend asks me to ask questions of the Liberal Front Bench. I shall not ask questions of the noble Lord, Lord Razzall, any more than the noble Lord, Lord Razzall, will persuade me to ask questions of the Conservative Front Bench. I am not in that business; I am here to do my best to answer questions, not to ask them. My noble friend asked me about the definitive number of jobs that are likely to go. This process is by no means complete. Even if it were complete, I prefer to rely on the ongoing work of the task force to discover the scale of the problem as well as to make suggestions for solving it.

Lord Monro of Langholm: My Lords, the noble Baroness, Lady O'Cathain, made the good point that if there had been earlier liaison between civil servants and BMW the problem would have showed itself perhaps last year. The civil servants would surely have had to inform the Minister--in fact, the Minister did not know this--that there were 60,000, 70,000 or 80,000 Rovers parked around Britain which were not saleable. That surely must have been a red light to the Government to take earlier action than they did.

Lord McIntosh of Haringey: My Lords, of course civil servants have been in discussion with Rover and they have reported to Ministers the results of their discussions. Among the issues discussed has been the question of the application for European authorisation for funding for Longbridge. But in the face of the clear statements from BMW both in December and in January of its continued commitment, it is difficult to see how we could have said, "We think you are liars".

Lord Shore of Stepney: My Lords, I think my noble friend will agree that BMW is not blameless in this matter but there is here a fundamental problem of the misalignment of the pound with the European euro or European currencies. That situation exists and we cannot just ignore it. Whether it is because the euro is too low, as my noble friend Lord Stoddart suggested, or whether sterling is too high, is in a sense irrelevant. Certainly we cannot just join now at 2.20 marks. To do so would be ridiculous. We would bankrupt the whole of our manufacturing industry.
	I put it to my noble friend in the form of a legitimate question that this clearly is not just a matter of BMW. We have Honda at Swindon--which I thought my noble friend would refer to--announcing lay-offs. Are we really to preside over the collapse of Dagenham as well? Something has to be done. If my noble friend agrees that there is a serious misalignment of currency, he must do something to operate through the Chancellor and the Bank of England on the exchange rate. Either he must sell forward and manipulate sterling, or he must give the Bank of England different terms of reference other than internal price stability.
	When we think that since the Germans bought Rover in 1995 there has been the largest appreciation--30 per cent--of the pound, are we surprised that they are in great difficulties? They bought Rover when it was losing £150 million a year; last year it was losing £750 million a year. That is not because of lack of productivity in the workforce; they have improved productivity every year. However, not only are we losing our exports, but imports are undercutting demand for our own cars in Britain. Something has to be done.

Lord McIntosh of Haringey: My Lords, my noble friend makes particular reference to Honda and to Ford at Dagenham. He really must not believe the scare stories in the Sun about Honda at Swindon. Honda has not made an announcement of job losses at Swindon. It has said that, having produced something like 25,000 to 30,000 below its 150,000 capacity, it proposes to reduce production by another 4,000 or 5,000 vehicles a year as a short-term measure. That is a far cry from what some newspapers have reported. Dagenham is not European-owned. Eurosceptics have insisted, with some justification, that the pound is not as strong against the dollar as it is against the euro. It is no good my noble friend simply saying that something must be done. We had a sensible two-and-a-half hour debate on this subject last week which I recommend my noble friend should read. Otherwise, it is simply like the Duke of York visiting the Welsh valleys; that does not contribute to political debate.

Lord Shaw of Northstead: My Lords, will the Minister tell us what meetings have taken place between the dealerships and the Government?

Lord McIntosh of Haringey: My Lords, any detail which it is possible for the Secretary of State to give within the bounds of commercial confidentiality in advance of and at his meeting with the Trade and Industry Select Committee will be made public. However, it is not for me to do that now.

Political Parties, Elections and Referendums Bill

Second Reading debate resumed.

Lord Neill of Bladen: My Lords, I take the House back to the Political Parties, Elections and Referendums Bill. I have an interest to declare in that I had the honour to be the chairman of the Committee on Standards in Public Life which produced the report we are discussing. My interest is to see that a Bill which carries into effect the recommendations of our report goes on to the statute book.
	It is a little intimidating to have so many members of my committee present, two of whom will speak after me and, no doubt, correct me. I refer to them in batting order: my noble friend Lord Shore of Stepney and the noble Lord, Lord Goodhart. I also see in the Chamber the noble Baroness, Lady Warwick. So four out of the 10 members of the committee are present today.
	I propose to follow the injunction of the noble Lord, Lord Mackay, for brevity certainly and, I hope, clarity. My colleagues and I have written at considerable length in the report what we believe needs to be done. In the debate on the Queen's Speech on 24th November last year, I spoke in general terms on this matter, welcoming the fact that the Bill was to be introduced and giving a little of the background to the work that the committee had undertaken. I shall refer briefly to that in a moment.
	Three general reflections have occurred to me on thinking about the debate. The first reflection is to remind your Lordships of the background. The committee of which I became chairman was about the fifth committee to have under consideration the topic of the funding of political parties. The Houghton committee was the first, some 24 years ago in 1976. That committee divided on party lines and nothing followed. There was then a Home Affairs Select Committee of another place in 1994, which met with a similar fate. In the mean time, there had been efforts by the Hansard Society. The only general reflection one draws from this is that it may on occasions be an advantage, in considering what is, in a sense, a highly political issue, to have the matter considered by an independent committee which is not in itself political. As your Lordships are aware, we had one member of each of the three major parties nominated to serve on the committee. They do not serve as spokesmen on the committee, but they have a great importance for the rest of the committee in telling us how the world works. That is one reflection.
	Another general reflection--I do not think that this point has been made today--is that great efforts will now be made in the House to perfect and to produce an excellent Bill.
	In addition, a change in the political climate and in the climate of thought is required. We do not need to look very far overseas to come across one or more countries which have on their statute books some excellent statutes which provide for the control and regulation of party funding. Those statutes are useless unless there is a general will to comply with their provisions. The only provision in the past of which we have any evidence that there has been some disregard is concerned with by-elections. There was evidence before the committee that in by-elections there was, as it was put by some witnesses, almost a conspiracy between the political parties not to report one another, even though there was some fairly blatant overspending. We shall have a series of extremely detailed rules backed by criminal sanctions, but it is essential that it should become unthinkable for any political party to want to cheat on the rules.
	My third general reflection concerns the question of public perception. In our work, my committee is constantly made aware that it is not enough for an institution or for a set of rules to be extremely good; we need to be aware of what the public think is happening on the ground. That was particularly relevant when we came to one of our main points, that there should be disclosure of the sources which give money to political parties. We encountered a great deal of public cynicism about such sources. The argument ran that people do not give large sums of money unless there is something in it for them. So we tried to come up with recommendations that had very much in mind the way in which ordinary people, the voters, will think of the system once it is up and running.
	If I were asked to summarise the key points in our report, I would say that there are only about five. First, we were very firm that there should be no state funding. We do not want that here. We visited at least one country where there was a large element of state funding and we did not particularly like what we saw.
	I have already made the second point: for transparency of the sources from which money comes. We thought that that was of prime importance. Any gifts above £5,000 should be publicly declared.
	Thirdly, we were against foreign money. We thought that support for political parties in this country should come from people who have an interest and stake here, who are present in this country and entitled to vote here.
	The fourth key provision or guiding principle was a limitation on the "arms race", which was referred to earlier. We saw that particularly well demonstrated in our visit to the United States, where we saw a great deal of evidence of that. In that context, perhaps I should mention the point made by the noble and learned Lord, Lord Howe, when he talked about the ban that we currently enjoy here on radio and television advertising. I am not sure that the House fully appreciates just how important and valuable that control is. The human rights convention has been mentioned today: supposing in some nightmare scenario a case was to go to the courts in this country, and ultimately to Strasbourg, in which it was ruled that it was contrary to the freedom of speech principle in the convention for us to have that control. Enormous pressure would then build up for additional funds, way above the £20 million cap that we recommend. The evidence in America was that approximately 80 per cent of the money raised by political parties is spent on short bursts of television and radio advertising, mainly of the negative kind--that is, not advocating a policy but denigrating the particular individual on the other side. That is a route down which we do not wish to go.
	My fifth point is that we thought it essential that there should be a body to supervise this new system--an electoral commission. There was some hostility initially in some quarters to that idea, but we did not see how the system could work without it. Having mentioned the electoral commission, perhaps I may add a footnote, again in line with the observation of my noble and learned friend. I am a little worried about overloading the electoral commission, particularly in the early days. There is a reference in Clause 12 to an educational role. In a perfect world, one might say that we should have a commission and that one of its duties should be to inculcate the sound principles of democracy. But that is not wholly compatible alongside the administrative duties, which should be its prime role, of ensuring that the system is up and running and that there is no cheating. That is quite different from going around schools, universities and debating societies and advocating the merits of the system we have in place. I have a concern that too much will be put on the commission--especially with boundary commission responsibilities thrust upon it as well--and that the hard core of what we wanted to do will, in a way, be diluted.
	I shall not detain your Lordships' House much longer, but I want to make one or two other points. As regards referendums, interestingly, when we began our work we did not start out thinking that that was a topic that would concern us; but as we went around collecting evidence, it suddenly became apparent that we could not tackle the question of the funding of political parties without considering this new instrument of democratic decision making--the referendum--and so we were drawn into it. We had some particularly interesting evidence. We travelled around the country--to Cardiff, to Edinburgh and to Belfast--and we had very recent evidence of how the system had been working.
	The most striking case, which has been most commonly cited--I mentioned it myself on the last occasion--was the experience in Wales which concerned the last minute actions of a couple of people. A lady had no money at all, but she borrowed £5,000 from her bank; she managed to get in touch with the son of a wealthy man, who himself had some money. Between them, they put together some £100,000--about 10 per cent of what the other side had--and they began to campaign about a fortnight before the vote. We all remember how close that vote was. It seemed to us self-evident that it is absurd to consult the general population and seek its views on an issue unless there is a machinery in place to ensure a clear statement of the arguments from each side.
	They do it differently in Dublin. They have a rather ingenious way of doing it there. They have a body--a referendum commission--which issues a statement giving the best case on each side. We are not proposing to do that here. But one has to have fairness and one must make the playing field as level as possible.
	We enunciated the principle that the Government should not spend state money on advocating a particular result in a referendum. In the end, although initially doubtful about it, the Government acceded to that proposition. There will be a period of one month, or 28 days, prior to the referendum when that principle will be observed. My committee thought about that and in the end accepted it as a reasonable "win" for our proposition, although of course it does not go quite the whole way.
	Where we are, and remain, unhappy--I wrote to the Minister about it--is on the issue of tax relief, which has been mentioned today. We thought that there was a danger with our proposals in the sense that some large givers would be deterred; and that some people who for reasons good or bad--some possibly very good--would not want their names publicly to be attached to a large gift. Therefore, we thought that a policy of encouraging the maximum number of small gifts should actively by adopted. The proposal was that gifts up to £500 should carry tax relief in order to encourage small people who would like to support political parties to give. We were not intending any bonanza for the wealthy, whereby one could give £500,000 and the state would have to cough up the balance. The overall cost would be minuscule in the scale of what we are talking about. We recommended also some Short money increases and so on--£2 million or £3 million has gone in that direction. It would have been a good thing to encourage democratic support for the political parties by making that concession. I am sorry that it has not proved possible for that to be done.
	The noble Lord, Lord Mackay, has drawn attention to a large number of points of detail on the Bill. We did not draft the Bill. We drafted the ideas which lie behind it. I hope that I shall be forgiven for not following the noble Lord down his ingenious route in looking at possible defects in various clauses. I commend the Bill in principle to the House and hope that it will finally be enacted.

Lord Jopling: My Lords, it is a pleasure to follow the noble Lord, Lord Neill. I particularly agreed with one of the final points he made about the attractions of tax relief. It is a great pity that the Government have not thought fit to include that kind of provision in the Bill.
	I have always taken the greatest pride in the British electoral system as it stands today--principally when I visit the United States. I have had the great honour of being the secretary of the British-American Parliamentary Group for the past 13 years. Hence I go quite often to meet members of the House of Representatives or the Senate. I am always overwhelmed by their envy of two particular parts of the British electoral system. The first is that we have only a three week campaign and very tight spending limits. The length of time that potential United States politicians have to spend on the road trying to get elected is quite horrific. I remember going to West Virginia and spending a day with Senator, as he now is, J Rockefeller when he was trying in 1972 for the first time to become the Governor of West Virginia. I remember his wife saying rather despairingly that they had already been on the road for a year and there was still two months to go until the election. In fact, he failed to win that time and he did not become Governor of West Virginia until the next election four years later, so I suppose that they had to spend another 18 months on the road. That does not seem to be a good system.
	The second great advantage we have--I come back now to points made by the noble and learned Lord, Lord Howe of Aberavon, and the noble Lord, Lord Neill--is that it is in this country held to be illegal to buy air time on either television or radio. Again, so many politicians in the United States have told me how they would welcome with open arms, although I do not suppose that the owners of the media companies would welcome it, a change in the law to make it impossible for those in the United States to buy air time.
	When we are changing our system of elections, as we are in the Bill, I judge it primarily in terms of whether we maintain fully those advantages with regard to a short campaign, tight spending limits and the fact that in this country we cannot buy air time on television or radio. Above all, we must ensure that there is no possibility that in an election or referendum in Britain either parties or individuals can hire air time. In the United States they would love to ban it. However, as I understand the position--the noble Lord, Lord Neill, skirted around this point--it is very likely that that would be held to be illegal under the constitution, which says that there should be freedom of speech. I agree with the noble Lord that it would be a tragedy if a human rights court somewhere, perhaps beyond these shores, ruled that in Britain we too must allow our politicians, in the interests of free speech, to be able to buy air time.
	The allocation in our three-week campaign of free air time during elections is perfectly fair and adequate. Indeed, anyone who has fought an election would agree that, for the public, three weeks is already a good deal too much for very many of them. With a whole number of new radio and television channels and with international channels like CNN, some companies would undoubtedly be all too ready, given an opportunity, to take cash for selling air time to candidates in British elections. I should very much like to see written on the face of the Bill a clear statement that it is illegal for candidates in elections or those pushing a case in a referendum to be able to buy air time and that they must confine themselves to the free allocation that is agreed.
	I say that principally because the new regulations in this huge Bill are much too complicated and go far too deeply into detail. I so agree with a previous speaker who referred to a step-by-step approach. The Bill as it stands will inevitably lead to a new science of keeping the campaign legal and within the law but at the same time taking advantage of all the loopholes in election law that appear as a result of the Bill. The complexity of the Bill and the raft of new offences, running into pages and pages, make it inevitable that not only will parties at local and national level need accountants to look after their finances, but those accountants and those organisers will need a lawyer at their elbow as well in order to ensure that they are kept within this new complexity of election law. The science, which I believe will grow, of finding loopholes in election law will be comparable to that of finding tax loopholes which has proved so profitable to so many professional people. Parties will be forced into trying to find such loopholes. I can hear them now saying, "If we don't take advantage of every loophole, the other parties will, and they will trample all over our backs".
	I turn to the issue of foreign funding for political parties. Although I understand the purpose of the Bill's provisions, I do not really understand how one stops the funding of political campaigns from overseas sources during an election. The noble Lord, Lord Marsh, asked a question about this matter during the Minister's introductory statement and we did not receive a satisfactory answer. I hope that we shall receive one. I speak of campaigns that would refer neither to the fact that an election was taking place nor to any election candidates or political parties; but the content of those campaigns would have a clear political message which would be very relevant to the issues surrounding the election or referendum. In the past, it could have been a campaign with regard to anti-nationalisation. Now, it could be a campaign that is either pro- or anti-Europe. It could be done by means of posters, by mass mailing or by the use of various IT techniques. This seems a wide open way in which the provisions that the Bill rather laboriously attempts to lay down could be circumvented.
	I turn next to the issue of referendums, and begin by expressing a personal prejudice. I believe, as a matter of principle, that referendums are a negation of the parliamentary system. I irritated my constituents over 33 years when I was a Member of another place by always saying that I would never support a referendum for anything. I detest referendums and have always wanted to vote against them. Hence, I should much prefer that there were no referendums, and for us not to have to make rules for their conduct. But if we are to have the wretched things, the terms of the question are crucial. A question set by Parliament, backed by the steamroller effect of the Whips, is the wrong way to decide what the question should be. I hope that the electoral commission will play a bigger part than the Bill seems to suggest in deciding what the question should be. The noble Baroness, Lady Gould, also referred to this matter.
	Finally, the Bill is full of over-complications; and it contains too many anomalies and unfairnesses. It will need a long and detailed Committee stage because it needs a great deal of amendment. What is needed, and what we want, is a Minister who is properly briefed, one who is understanding not only of the Bill but of election law and practice, and who is sufficiently flexible to ensure that the finished product is fair and that it can achieve a consensus in this House.

Lord Shore of Stepney: My Lords, I begin by declaring an interest as a member of the Committee on Standards in Public Life whose report underlies most of this legislation. My remarks need to be brief. I certainly do not disagree with what my most distinguished chairman had to say, and indeed said so well. He has been an excellent, and independent, chairman of our committee, unequalled except perhaps by his distinguished predecessor, the noble and learned Lord, Lord Nolan. We have been very fortunate.
	I want to pick up the point made by my noble friend Lady Gould, who is no longer in her place. She went to the heart of the matter when she said that the concern is, above all, about doing something to prevent the purchase of political power. That is the underlying thought. It is certainly one that I have had--not necessarily at the top of my mind but it has always been there--since I became interested in politics. The irony is that, when I first entered politics, one of the thoughts that associated itself with the concern about the purchase of political power was the perceived imbalance in purchasing power as between the Conservative Party, our principal rival, and my own party, with its much more limited access to funds. Now, in the curious way that events have of standing everything on its head after 30 or 40 years, we find that disclosure--the naming of names, the identification of where money is coming from--no longer fits the old pattern of the corporate finance of Conservative power, but that New Labour has equal access to corporate power. Whether that will remain true in the future, as it undoubtedly has been in the recent past, I do not know; but in the past decade the old imbalance has virtually disappeared. That is healthy for British politics. I am all for a general balance.
	What I particularly like about the Bill is that it does two things which we all agree are important and worth while. First, it insists that the parties disclose the sources of their funds. Anything over a small amount must be made clear. That must be healthy; it must be right. We know, in other words, who is contributing and whether the motives for the contribution are entirely above board, or whether they are suspect or open to criticism. We can then develop the case. That knowledge is a great advantage. Frankly, it was not something that we used to know about my old rivals in the Conservative Party, and I welcome the new provision.
	Having provided for openness in regard to party finance, the Bill moves to the second stage: exercising some control over it. I am not yet entirely clear in my own mind precisely what the Bill is doing in terms of the regulation of party finance between elections, as it were. I shall need to think about that carefully when we come to the Committee stage. However, I am sure that during the crucial election period--the four weeks, or 33 days on average, which elapse between the Prime Minister announcing an election and polling day--moneys should be strictly controlled. If they can be equalled on one side and the other, that is wholly to our advantage. But the placing of a limit on what can be spent, and the requirement to declare on a weekly basis (if need be) during the election period what is flowing in, is important. It is an enormous advantage.
	I could say a great deal more about the Bill's positive features; however, I shall content myself with reference to two matters of concern. The first is the idea of placing a limit on what people can contribute during an election campaign and then saying that it will apply retrospectively over the previous 365 days. That is nonsense, and we know it. I know that the Government will rethink that provision. I cannot believe for a moment that they would be satisfied with such obvious nonsense. So we have to get rid of that.
	Another much more serious matter is that touched on by the noble Lord, Lord Jopling, who perhaps did not have sufficient time to develop the point. I refer to control over the foreign funding of British politics. I do not believe that any of us cavil with the general aim of the Bill in that regard. Page 2 of the Explanatory Notes states that,
	"Part IV imposes restrictions on the sources of donations so as to prohibit foreign and anonymous donations".
	I wish that it did--as I believe do the Government. However, when one turns to a later paragraph in the same paper one comes to "permitted participants"; that is, those who can spend money in British politics. One finds a reference to those individuals who are registered in an electoral register and to companies
	"incorporated in the European Union",
	not the UK. This may be a coach and horses to be driven right through the integrity of British politics. We must not imagine for a moment that vested interests on the other side of the Channel do not exist. Does one imagine that in something like a referendum on the single currency money will be withheld from European companies or the agencies of the European Union? This must be stopped. The only reason it has not been stopped so far is not that the Government do not want to do so, but because they fear that they are under the jurisdiction of the European Court of Justice. That must stop, and I shall be interested in all those who, like me, will want to table amendments to bring that about.
	Having said that, I conclude on a more optimistic note. I wholly endorse the observations of my old friend the noble Lord, Lord Jopling, about the merits of the British electoral system compared with that of the United States. Gosh, we are lucky! The noble Lord, Lord Neill, referred to the tremendous advantage in being able to control television and radio. That is a real boon. I do not know anyone engaged in American public life who is not in debt, at least to begin with, in order to finance his own political activity as a candidate or member. Just imagine a member of Congress facing an election every two years without any limit on campaigning and the need to raise money to reach his electors. Awful!
	The other matter of which we can be proud is that there is a tradition of honesty and fair play in this country which extends to politics and political parties. The noble Lord, Lord Neill, mentioned en passant that it is one thing to have laws but another thing to obey the spirit of them and to wish to see them carried out. Frankly, the revelation about Kohl, Mitterrand and others and the way that they have manipulated and misapplied rules and transferred money across frontiers is something that we do not want to emulate. We have something of which we can be quite pleased and proud. Let us hold on to it and strengthen it, as I believe we can do if we get the Bill right.

Lord Lamont of Lerwick: My Lords, it is always a pleasure to follow the noble Lord, Lord Shore, who is a man of passion. For a moment I thought that his passion would be uncharacteristically modified by the inhibition he felt by being part-author of the Bill. However, towards the end we saw the noble Lord's usual passion, and impressive it was, as always. Like my noble and learned friend Lord Howe, I apologise to the Minister and my Front Bench that I cannot be present for the winding-up speeches tonight owing to a long-standing engagement. That is a practice to be deprecated and it is not one that I normally follow.
	I accept the broad thrust of the Bill. When he introduced it the Minister referred, perhaps a trifle heavily, to sleaze. It is right that we should seek to improve and achieve the highest standards in public life in the world, but I wish that we would view the problems in perspective and see that often our so-called sleaze is, as the noble Lord, Lord Shore, said, very small beer compared with what is manifest on the Continent.
	This Bill is the product of the committee chaired by the noble Lord, Lord Neill, to whom I pay tribute. The House is indebted to the noble Lord for his lucid and cogent speech today.
	It is always good to be predictable and not to surprise anyone. I should like to concentrate on those aspects of the Bill which deal with referendums. I appreciate that this is not just a Bill about the forthcoming referendum on the single currency, but inevitably that is in many people's minds and we must judge the provisions in that light. It is right to achieve fairness to both sides in a referendum, and that is very important in a referendum on the single currency. That point is illustrated by what is going on at the moment in Denmark, which should be a warning to us. Denmark is holding a referendum on the single currency, and much more money has been spent on the side which favours joining the single currency.
	This is a far-reaching Bill. As my noble and learned friend Lord Howe and my noble friend Lord Jopling have said, it is very intrusive, bureaucratic and probably unworkable. We must be careful that in seeking to address one problem we do not affect the rights of the individual to campaign and propagandise. I regard the phrase "permitted participant" as rather chilling. We have come a long way when we write into legislation such an expression as applying to politics.
	The electoral commission is a very important body with huge responsibilities. I question the desirability of Clause 12 which enables the commission to carry out programmes of education, including programmes related to the institutions of the European Union. Do we really need this? A vast budget for informing people about the institutions of the European Union is already spent by the EU itself. Could this education programme include the European Central Bank, which is one of the institutions of the European Union that is central to the issue of the single currency yet to be decided in a referendum?
	But the main objection is not a European one but the fact that, as the noble Lord, Lord Neill, said, the commission already has a vast range of responsibilities. It is too easy to say that if there is a problem it should be left to the commission. As the Neill Report itself said, the commission cannot solve all problems. If that body is to be involved in educative publicity about electoral reform, or becomes embroiled in the pros and cons of the additional vote versus the single transferable vote, not just proportional representation, it will undermine its authority as a regulator. I believe that the two roles are in conflict.
	I turn to the issue of referendums. The report addressed itself manfully to the very difficult issue of trying to ensure fairness. It was not asked to go into that territory but did so. It referred to the experience of the Welsh referendum and expressed unease that the Government had been very active, and all the money had been spent on one side. The result was extremely close and might have been very different if the arrangements had been otherwise. As a consequence, we have the proposals in the Bill.
	Clauses 97 and 98 define the referendum period. That is particularly important because it is the period in which the umbrella organisations have their expenses calculated. The Bill tries to ensure fairness and prevent votes being bought. None the less, I suggest that it ends up giving an advantage to the organisation with the biggest pocket; namely, the Government.
	Perhaps I may take as an example a theoretical referendum on the single currency. I accept that the Government cannot shut down for several months their activity on European matters. However, under the Bill any organisation campaigning to retain our national currency will have its affairs and expenses regulated for up to four months in the period between the Bill for the referendum being introduced and polling day. The period between the introduction of the Scottish devolution Bill and the vote on Scottish devolution was 119 days. The umbrella organisation is monitored and its expenses start to tick. But the Government are able, free of scrutiny, to carry on issuing press releases--let us say in favour of the single currency--until 28 days before polling day. That does not seem equitable.
	It was argued in another place that that is no different from the practice in previous general elections. The Bill seeks to make different provisions. It seeks to provide that expenditure is controlled in the run-up to elections. But elections are different from referendums. Referendums are about single issues; elections are about many issues. One cannot expect the Government to close down for the whole period leading up to an election, but one could reasonably expect the Government to close down for a longer period than 28 days in the period leading up to a referendum on the single currency. Under the Bill, if the noble Lord, Lord Owen--he was present earlier--were part of an umbrella organisation, his press releases would be costed against his total permitted expenditure. However, there will be no restraint on Ministers until 28 days before polling day. I do not wish to over-emphasise the point, but it is important.
	I turn to caps on permitted expenditure by political parties during referendums. The Neill Committee saw no objection to caps in principle but concluded that in practice they were impractical. None the less the Government have put forward Clauses 108 to 111. The key mistake the Government have made is to define the caps by reference to political parties. One reason that we have referendums--notwithstanding the remarks of the noble Lord, Lord Jopling--is to settle issues which cut across party lines. While parties are essential to general elections in order to simplify choice on many different issues, referendums are single issue campaigns. In some referendums in future parties may not even be the main movers in the campaign. By placing caps on the party's expenditure rather than on the umbrella organisation, and by placing caps calculated on the basis of votes cast at the last election, the Government have produced a situation which would be unfair in any referendum relating to the single currency. On the basis of the last election the pro-single currency parties--the Labour and Liberal parties--would be able to spend £8 million to £9 million while the anti-single currency campaign would be able to spend only £5 million.
	When the Home Secretary was asked about the matter in another place he replied, "Well, of course, there is no way that the Liberals will ever be able to raise their £3.5 million, or anything like that". I do not know about that. But it seems bad law to put down on the statute book arrangements which are manifestly unfair and then say, "It doesn't matter because it won't work out like that in practice". How does he know that money cannot be transferred to the Liberal Party? From debates in another place there appears to be nothing to stop other organisations channelling their money to the Liberal Party. I refer to the European Union. The question was put to the Minister today about how caps affected the European Union and the Commission. I do not wish to be harsh but the Minister gave a somewhat lame answer. My noble friend Lord Jopling is right. We need an answer to the question of how the caps bite, if at all, on the European Union. How will its expenditure be controlled in a referendum on the single currency?
	In the debate in another place, Ministers gave a rather pathetic impression of simply appealing to the European Union not to interfere in the single currency referendum because it might well boomerang and be counter-productive. That slight note of panic in their voices merely fuelled further suspicions.
	Then there is the question of whether caps can work. There is a limit of £0.5 million for other organisations which are not the umbrella organisations referred to in Schedule 13. It was confirmed in debates in another place that organisations can split themselves into two, three, four or five bodies, all with different names. Each body will be entitled to spend £0.5 million if it can raise that sum. I do not see how the caps can work. The provision is futile and self-defeating.
	The same argument applies to caps at the other end of the scale, to the individual. Clause 112 states that no individual can spend more than £10,000. But individuals can band together and create campaigns in specific areas. It would be next to impossible for the commission to stop that; and it would be questionable whether it would be right to do so.
	I understand the Government's problem. They fear that if there are no limits money may dominate the campaign. On the other hand, it is important not to prevent individuals expressing themselves and communicating their views. Therefore they believe that they must strike a balance. However, I fear that in pursuing that elusive balance, they have merely produced bias. What they have produced is unlikely to be effective. In their efforts to be effective, they have produced a system which in the single currency referendum will favour the Government.
	The Government have one other overwhelming advantage. They can choose the date of the referendum. Any anti-single currency organisation may fritter away its money, not knowing whether or not the Bill to trigger the referendum is about to be introduced next week. The Government have a huge advantage through timing.
	In trying to control spending, the Government have made the wrong choice. There are three alternatives. To cap umbrella organisations is difficult. A cap on each participant is difficult. I am inclined to favour no cap on spending as the Neill Committee recommended. In pursuing perfection we are out of touch with reality. The reality is that the publicity on the matter will be huge and unlimited--in the newspapers and the media. The reality is that any money raised will be spent one way or another and no legislation will stop that.
	It is all very well for Ministers in another place to say, "Something has to be done". That is always a poor recipe for policy; it invariably leads to trouble. It is all very well asking, "What is your alternative?" The alternative to jumping out of the window is not to jump out of the window. The Government have gone down the wrong road. I applaud much of the Bill. However, I fear that the proposals applying to referendums are unfair. I shall watch out eagerly for any opportunities to amend the Bill.

Lord Goodhart: My Lords, I am very pleased to be speaking in the debate. I am particularly pleased because I, too, am a member of the Committee on Standards in Public Life. I echo the tribute paid by the noble Lord, Lord Shore, to our chairman, the noble Lord, Lord Neill of Bladen. I was going to say that I am delighted to follow the noble Lord in this debate. Unfortunately, that would not be true as the noble Lord has already said more or less everything I was going to say. Therefore, what I shall say will sound somewhat familiar.
	It is gratifying to us on the committee that not only have the Government accepted almost all of our recommendations, but have proceeded to implement them quickly. It is still only 18 months since the publication of our report and this major piece of legislation has reached the half-way stage of its process through Parliament.
	Before discussing the Bill in more detail, I should make my position clear. The recommendations in the report and the provisions of the Bill are not wholly consistent with the position of my party. The Liberal Democrats strongly welcome the Bill, but believe that in some respects it does not go far enough. In particular, as my noble friend Lord McNally pointed out, the Liberal Democrats would like a good deal more emphasis on state funding. No doubt my party will want to table amendments on those issues, but it would not be proper for me to move or support amendments which are inconsistent with a report which I signed. Therefore, I shall participate in debates on the Bill from the Back Benches.
	There are four central proposals in the report. The first and foremost is transparency. The identity of donors of gifts above a minimum size and the amounts given by them must be disclosed. Money often buys influence and it can certainly buy access. Perhaps I may take a non-controversial and well-known example. The influence of the trade unions on the Labour Party, particularly in the past, has been due at least in part to their financial support of that party.
	If we know where the money is coming from, we can scrutinise the behaviour of the party which receives it. Is the party going out of its way to take action, or to avoid taking action, in ways that will benefit the donor? Is there a quid pro quo for the donations? If the information about the donations is in the public domain, the press and the other political parties will be watching to see what the donor gets out of it. If the information is kept secret, the watchers do not know where to start.
	Secondly, funding must come from those with a real interest in the outcome of the election--that is, from people who are on the electoral register or from companies carrying on business in the United Kingdom--not from long-term tax exiles. In that, I disagree with my colleague on the committee, the noble Lord, Lord Shore. Overseas companies usually carry on business in the United Kingdom through subsidiary companies incorporated in the United Kingdom. Under our original proposals, such companies would be permitted donors. The only extension made by the Bill is to a business carried on in the United Kingdom which is carried on by a branch rather than a subsidiary of a company incorporated elsewhere in the European Union. There must still be a business carried on in the United Kingdom. That seems to me to be a relatively minor extension and a perfectly acceptable one. In any event, wherever quoted companies are incorporated, their shareholdings are increasingly international.
	The third central element is the limit on national campaign expenditure. The fund-raising "arms race" increased greatly at the previous election. Vast sums were spent on billboard advertising by both Labour and Conservative Parties. Those, as a member of the Conservative Party later admitted, were almost certainly wasted, but each party felt that it had to keep up with the other. An uncontrolled "arms race" means that parties become ever more willing to solicit and accept dodgy donations and ever more dependent on finding and keeping supporters who can give them individually millions of pounds.
	The fourth essential element is the electoral commission, whose role will be central to the enforcement of rules under the Bill. The commission will also enable existing rules on local spending limits to be enforced more effectively and will enable election rules to be updated much more regularly than at present. Indeed, it is necessary to say that the other reforms proposed in the Bill would not work without an electoral commission.
	On all of those central issues, the Government have accepted the recommendations of our report more or less as they stand. Indeed, in one respect, I believe that the Government have improved on our proposals. We proposed an exemption of £50 for anonymous gifts. The Government propose to exempt from the reporting obligations, and therefore from a considerable amount of record keeping, donations whether anonymous or not up to £200. That will reduce the burden of record keeping for parties, particularly at constituency level, without opening a substantial loophole. There are anti-avoidance provisions to prevent people giving more than £5,000 by means of a large number of small donations. That change also remedies an unintended defect in our proposals. It was that those too young to be on an electoral register could not pay membership subscriptions to parties and therefore could not be party members.
	I turn to other issues. The Government have dealt sensibly with the difficult issue of the political activities of third parties, in particular various single-issue pressure groups. The decision of the European Court of Human Rights in the Bowman case shows that denying such groups the right to intervene in elections or referendums is an unacceptable infringement of freedom of speech. I have to say that having read that judgment I am persuaded by it. However, experience in the USA shows that some limits on third-party spending are essential. The Bowman judgment makes it clear that the courts would be prepared to accept reasonable limits on third-party spending.
	I do not want to discuss the special treatment of Northern Ireland parties in detail, but I believe that it is a regrettable necessity.
	The treatment of referendums has been one of the more controversial issues in the Bill. The Neill committee did not recommend spending limits because we thought them impracticable. However, as we made clear in subsequent correspondence, we have no objection in principle. The Government differed from our view and decided to impose spending limits. On reflection, I believe that they were right to do so. The problem with the Government's original proposals was that the limits were entirely based on parties. The spending limit for each party represented in the House of Commons in a national referendum was to be £5 million. I believe--and slightly to my surprise I find myself in agreement with the noble Lord, Lord Lamont--that the party-based ceiling produces unfair results where most parties are on the same side. That was the case in, for example, the Welsh referendum, in which Labour, the Liberal Democrats and Plaid Cymru were on one side, and the Conservatives effectively played no part.
	It is fair to say that the preference of the committee was to direct spending much more through umbrella groups, where it was possible to form them, than through the parties. In the Bill the Government have moved a little way towards that by scaling down spending limits for parties with less than 30 per cent of the national vote, but it is questionable whether they have gone far enough.
	Finally, there is one major issue on which I believe the Government got it seriously wrong. I refer to the question of tax relief on political donations. There is a precedent for giving tax relief on political donations; there is, and has been for many years, relief from inheritance tax on donations to political parties, if those political parties either have two Members in the House of Commons or have one Member and the party received a total of at least 150,000 votes. The proposal of the Neill committee was modest and was targeted on smaller donations in order to avoid giving disproportionate advantages to parties with wealthy supporters.
	We proposed a limit of £500 a year on donations on which relief can be claimed. To ensure that there was no extra benefit to wealthier donors, we proposed that relief should be given only at the basic rate of tax and not, as in the case of gifts to charities, at the higher rate of tax as well. I believe that it is in the interests of democracy that parties should be funded by a large number of small donations rather than by a small number of large donations. I believe that anything that increases the value to political parties of small donations is to be encouraged. Further, the giving of tax relief on small donations sends out the message that, for ordinary people, giving to political parties, like giving to charities, is good. It is to be encouraged because it contributes to the democratic process.
	What, therefore, are the Government's objections? Originally, the Government objected on the ground of administrative burden. It seems that that objection has now been dropped. Of course, the administrative burden of dealing with claims for relief from a handful of political parties is as nothing compared with the administrative burden of dealing with claims for relief from literally thousands of charities. Charities are now able to claim relief on one-off gifts of any amount because the £250 floor on gifts that are eligible for gift-aid relief is no longer applicable.
	However, the main argument, which we heard again in the Minister's opening speech, is that the giving of tax relief reduces tax receipts and therefore less money is available for schools and hospitals. That has been argued time and time again--and it remains totally absurd, as it always has been. Let us compare £4 million or £5 million with, say, the £92 million which, I believe, was the Government's advertising budget last year; the Government estimate the cost of tax relief to be only £4 million or £5 million a year. That amounts to 0.001 per cent of government revenues. In other words, tax relief on donations to political parties will reduce the revenue by approximately £1 in every £100,000. It seems to me to be a total absurdity to complain about that on the ground that it will make less money available for schools and hospitals. Plainly, it is a price that is worth paying for the protection of democracy.
	Of course, tax relief is a matter for the Budget and would not in any event have been dealt with in this Bill. However, I hope that the Government will reconsider their objections and that there will be such tax relief in next year's Budget. With regard to what is in the Bill, I can welcome it virtually without reservation. Democracy is about the power of people, not about the power of money. The power of money thrives on secrecy and darkness. I believe that throwing light on the funding of political parties will weaken the power of money and thereby strengthen democracy.

Lord Norton of Louth: My Lords, I wish to make a general comment about the Bill and then to focus on its particular parts. There is much to welcome in the Bill. However, I believe that there is a problem in terms of what it does not do and what it seeks to do, and that there is a danger of missing the broader picture.
	When he introduced the Bill at Second Reading in another place, the Home Secretary said that parties were vital to the functioning of any representative democracy. He was absolutely right and I can fault nothing in his comments about the role of parties. However, I am not sure that the Bill goes quite as far as he suggests in addressing the problem that now faces political parties and, indeed, the political system.
	People are now less likely than they were 30 or 40 years ago to join a political party. Fewer people become involved in political activity. The MORI Omnibus polls show that young people between the ages of 16 and 24 are less politically active now than they were at the beginning of the 1970s. Voting among that group has fallen by almost one-third.
	The Home Secretary said that we should celebrate the fact that so many supporters of political parties recognise their civic responsibilities by contributing to their party's financial well-being. I agree. However, the real issue that needs to be addressed is why so few people contribute to political parties and, indeed, why so few people join and are actively involved in political parties.
	The Bill seeks to restore public confidence in the political process by providing for greater transparency and accountability in funding and for limited campaign spending. It is difficult to disagree with the aim of the Bill. However, I am not altogether certain that it is as well crafted as it might be for fulfilling that particular aim. Nor am I sure that it does a great deal to address the wider problem that I have identified. As some noble Lords have mentioned, some of the provisions may serve as a disincentive to political activity.
	That is not to argue against the Bill but rather to call attention to the fact that we should be looking at the causes of political alienation and why people do not become involved in the political system. I believe that there is a danger of placing too much reliance on the Bill, and also the Representation of the People Bill, to improve the health of the political system. Such measures may help but, if they do so, it is likely to be at the margins. We need to devote more time and resources to addressing the more fundamental questions.
	I turn to what is in the Bill. I welcome many of the provisions but I believe that it contains a number of problems. One concerns the remit of the electoral commission. It is given certain duties to fulfil which are not appropriate, while it is denied a role that I consider central to its existence. Under Clause 12, the commission is empowered to promote public awareness of electoral systems, systems of local and national government, and the institutions of the European Union. That takes the Bill beyond what the Neill Committee recommended.
	I can see the case for the commission to promote awareness of electoral systems. That is perfectly sensible and proper. However, as do other noble Lords, I fail to see why promoting awareness of systems of government--be it local, national or the European Union--falls within the remit of an electoral commission. That is to confer an educative function that takes it beyond its obvious sphere of competence. Indeed, I shall be interested to hear from the Minister how he reconciles Clause 12(1)(b) and (c) with the Long Title of the Bill.
	Therefore, the commission is given things to do that are not appropriate. At the same time, it is not given a role that I would consider fundamental to its existence; that is, to advise on the question to be asked in a referendum. I appreciate that the Neill Committee did not recommend explicitly that it should be given that role. However, I believe that it should be a central function of the commission. Although there is provision for the commission to review and report on the conduct of referendums and to offer advice to relevant bodies, there is nothing on the face of the Bill that requires it to be consulted on the wording of a referendum.
	I suggest that the question in any referendum must fulfil two fundamental criteria. It must be unbiased and, equally important, it must be unambiguous. This second criterion has not received the attention that it deserves. If the meaning of a question is not clear, it is possible for voters to cast what, quite simply, are termed "mistaken" votes; that is, voting contrary to what they believed they were voting for. Research has shown that in some state referendums in the US, between 10 and 20 per cent of voters have cast "mistaken" votes.
	Surely, the electoral commission has an obvious role in ensuring that both criteria are met. It will have the professional expertise, as well as the organisational capacity, to undertake pilot surveys. However, the fact that a question permits of ambiguity may not be apparent until it has been tried out in such a survey. One needs a body--a qualified body--to undertake such work. I believe that the case for conferring such a responsibility on the electoral commission is compelling. At a minimum, the Bill should embody the requirement that the commission be consulted on the wording of the question.
	I turn to the provisions which govern the funding of political parties. I appreciate the argument that motivates this part of the Bill. In the other place, the Home Secretary stressed the need for funding to be transparent. In fact, the Minister said that it should be "open and transparent" and I look to him to explain later the difference between openness and transparency.
	However, the Minister missed two other essential criteria. For the Bill to be effective, it has to provide for transparency, enforceability and equity. The regime created by the Bill is overly detailed and bureaucratic. It imposes a massive burden, arguably an intolerable burden, on party treasurers, not just nationally but also locally. I am not sure that the parties at local level have the capacity to meet the phenomenal compliance burden. I suspect that the Bill lays down rules that will be difficult to enforce and which, in some areas, can be circumvented. Any wealthy foreigner resident in the United Kingdom could acquire economic citizenship of one of a number of Commonwealth countries and then, by virtue of that status, register to vote in this country, thus becoming a "permissible" donor. There is a serious problem of equity in terms of donations made by companies. That point has already been made and I will not expand upon it.
	The provisions governing Northern Ireland--again as we have heard--clearly create an inequitable situation. And what is the justification for a Swedish citizen resident in the United Kingdom being a permissible donor when a Norwegian citizen resident in the United Kingdom is not? There may be a case for re-casting the provisions of the Bill to provide for a much simpler regime. I should be inclined to slim down drastically the excessive degree of regulation, especially in distinguishing between types of donors. To be enforceable, the real need is to be simple and straightforward.
	Finally, I turn to the provisions governing referendums. I have spoken already regarding the role of the electoral commission in respect of referendums. I believe that other changes are necessary. Like my noble friend Lord Jopling, I have a principled objection to referendums. I should prefer that we did not have them. However, if we are to have them, then they should be subject to rules that are clear and consistent. We should not have rules which are made up each time a referendum is held. There are two problems with referendums: first, ensuring a fair and unambiguous question; secondly, ensuring an adequate turn-out of electors. I have already addressed the first problem. What about the second problem? The excellent book, Referendums Around the World, edited by David Butler and Austin Ranney, embodies research that shows that turn-out in referendums tends to be lower than that in elections of candidates to public office. Indeed, we have experience of that in the United Kingdom.
	A low turn-out in a referendum is not only more likely than in an election to public office, it is often a greater cause for concern. With elections to public office, the candidates who are elected can be removed in a subsequent election. In many cases, the outcomes of referendums are difficult to overturn. Once something has been approved by referendum, it may be set in stone for some time.
	There is a powerful case to be made for introducing a threshold requirement, providing that a certain proportion of eligible voters vote yes in order for the vote to be valid. Various countries impose thresholds. Thresholds were, of course, stipulated by statute for the referendums in Scotland and Wales in 1979. I do not think we can chop and change from one referendum to another. Either we have a threshold or we do not. The case for a threshold is compelling. Referendums tend to be held on important issues and there is the danger of some irrevocable step being taken on the basis of the votes of a minority of electors. Therefore, I believe that a threshold, including the precise percentage to be reached, should be written into the Bill.
	This is something of an omnibus Bill. We must not lose sight of the wider problems that it does not address. In terms of what it does cover, it is clearly a substantial and important Bill. It deserves the most detailed scrutiny in Committee in order to ensure that the various criteria that I have outlined are met. If Government accept those criteria, then I hope that they will respond positively to the proposals that I have put forward.

Lord Harris of High Cross: My Lords, we have heard some good speeches. What interested me especially in the unusually cheerful speech of the noble and learned Lord, Lord Howe, was his outspoken dismissal of seeking salvation through legislation. That encourages me to cast caution to the wind. It seems to me that the case for the Bill takes only a moment's thought. If we accept limits on spending for parliamentary elections, then why not have limits for referendums on an issue of exceptional significance, like the euro, that cuts across party lines? At first blush, equal spending by two sides seems the plainest of fair play. To use the over-worked European slogan, why should we not have a level playing field? A referendum offers two sides. It is either yes or no. I confess that "two sides, equal spend, fair's fair" was my initial reaction at first reading, after only a moment's thought.
	Doubts on the application of the Bill to the referendum arise only on a second reading, following more mature thought. It is true that there may be only two sides, but as in geometry there could be three, four or more angles. On the euro, the "Yes" men would range from the European payroll vote--rather well-represented in this House--to the outright federalists who support anything labelled European whether from unfounded optimism about the Continent or equally unfounded pessimism about their own country. We are told that the "No" vote would range from the extreme xenophobic nationalists to the enlightened, internationally-minded, classical liberal economists, such as myself.
	Let me come clean at the outset. Old hands in politics say one must never say "Never". Thank heavens I am not in politics--perhaps because no one will have me. But my considered formula, which differs from the Tories' compromise, is that I cannot visualise any circumstances in which I would wish Britain--or, if it comes to it, England--to sign away its economic freedom by submerging the pound into the euro, or, for that matter, into the dollar. Who will present that emphatic opinion?
	Should there ever be a referendum on the euro between the baddies and us goodies, how should the permitted limit on spending be allocated between the rival factions on both sides? Even if some objective authority could be found to fix quotas for the three main parties, how would the noble Lords, Lord Shore and Lord Stoddart, be able to organise the pro-Labour, anti-euro group, or the noble Lord, Lord Owen, appeal to his distinctive constituency of sophisticates who appear enthusiastically to support all things from Brussels except the euro? Then, I am told, there is at least one discerning Liberal Democrat whose true liberal principles lead him to oppose this example of naked price-fixing of currencies. Is he to be prosecuted for campaigning among his confused colleagues? What is all this about "permitted participants", "responsible persons" and "designated organisations"? I agree with an earlier speaker who said there was some faintly anti-democratic, authoritarian ring about that.
	We have heard about the one-sided propaganda from Brussels; we know of it from our own radio and television programmes. And, of course, we have had it for some years from Her Majesty's Government, not least in the schools. As for the British press, I can only say, thank heavens, that the majority, anti-euro voice predominates in the most successful newspapers. I would argue that they provide a better reflection of public opinion simply because they have to take account of their readers' preferences. But do our would-be controllers think that space devoted by newspapers to arguing the pros and cons of Europe should be controlled or influenced by such independent arbiters as, perhaps, Alastair Campbell or Peter Mandelson?
	Whatever our first instinctive feelings on the merits of this Bill as it applies to referendums, I believe that more mature reflection leads to serious doubts that a simplistic rationing of the argument is either feasible or necessary. It is not feasible because strict quotas could not in practice be enforced nor arbitrary time limits imposed on campaigning.
	How on earth could approved limits on spending be measured or fully monitored? What debit would be charged against a campaign for using up stocks of leaflets or promotional videos which had been deliberately piled up in advance? What is to happen in relation to the CBI or less easily organised small businesses or straightforward patriots spending their own money to air their anxieties? How is it possible to monitor badges or T-shirts with appropriate "Keep out" slogans? Are they chargeable? Do they become chargeable if the noble Lord, Lord Stoddart, buys thousands of them to distribute freely among his trade union supporters?
	One noble Lord mentioned the Internet which will plainly play an increasing part in all future campaigns. Is the organisation of tens of thousands of messages to be tracked, counted and charged against the financial quotas of one side or the other?
	Fixed budgets are neither feasible nor necessary. The only rough justice must be rigorously to check government spending to prevent the ruling party using voters' money to influence the voters' choice. As we have learned recently, that happened on a shameless scale under Ted Heath in the early 1970s.
	As the noble Lord, Lord Shore, acknowledged, it is no longer true that the Tories can automatically outspend the rather more furtive moneybags of new Labour and the trade unions. So long as governments do not cheat, we must assume that the ability of both sides to raise campaign funds, not to mention recruit voluntary canvassers and other help in kind, is an approximate reflection of public support for their respective positions.
	My conclusion is that we should stop searching in vain--like Tony Blair's army of advisers, dreamers and interfering nannies--for a new deal, a fair deal, an ideal world with a perfectly level playing field. Let us settle for the rough and tumble of the real and admittedly messy world of democratic politics.

Lord Cocks of Hartcliffe: My Lords, I support what was said by the noble Lord, Lord McNally, and my noble friend Lady Gould about the difficulty of finding somebody suitable to be a commissioner who had no recorded views and had never taken a stance on any subject. Such paragons, if they could be found, would not really be suitable for the job. In fact, if someone reaches the age at which he is considered suitable to be a commissioner and it is not possible to detect anything on which he has taken a stance, everyone automatically thinks, "What is wrong with him? What has happened there?" So we really must try to keep in touch with reality in that regard.
	The noble Lord, Lord Neill, mentioned the referendum in Wales and the disparity of funds on different sides. But he did not go on to mention that the Rowntree Trust gave money to the "Yes" campaign but not to the "No" campaign. When I asked it why it had not contributed to the "No" campaign, it said it believed in proper democratic debate. At that stage, I gave up.
	The noble Lord, Lord McNally, raised the question of state funding. It is not through lack of will by the previous Labour government that that was not introduced because, as Chief Whip, I was charged with implementing the Houghton report which recommended state funding. But I did the arithmetic and I simply could not get it through because several of my Members objected on conscientious grounds. They felt that they could not stomach making the general public pay for the political parties to indulge themselves. I tried to reason with them but I could not do it. That is why we did not get the Houghton report through. I must tell your Lordships in frankness, with my non-conformist background, that had I been a Back-Bencher being approached by the Chief Whip, I should have taken the same stance myself. But in no way did I ever give any idea to the victims that that was my feeling.
	The noble and learned Lord, Lord Howe, was quite right when he talked about the plethora of advice which this will generate. We shall almost have a new profession of advisers. Those people will advise that in order to be completely free of any possible legal action, in every committee room and every room used by the volunteers, on the wall there should be a list of offences and the penalties so that everyone is clear about the matter. One look at that lot and you could shut up the shop because people simply will not want to be associated with it.
	I support the Front Bench on the question of no tax relief on donations. The working classes are already paying for the luxuries and entertainments of the middle classes through the lottery. It is said that the lottery is a voluntary matter and that they do not have to buy tickets. That argument just about stands up but it is touch and go. Why a bus driver--I will not refer to somebody digging holes in the road out of deference to the noble Lord, Lord Peyton--or a manual worker should pay tax in order that the Liberal Democrats, the Conservatives or the Labour Party can thrive is absolutely beyond me. It is so basically inequitable that there would be a massive rebellion by taxpayers who would pay in their money and deduct that portion of it.
	I regard this Bill as hybrid, not in the parliamentary sense but in the sense of its origin. I believe that its parents are, first, the chattering classes and, secondly, the spin doctors. I have referred to the chattering classes before in this Chamber. The noble Lord, Lord McNally, put his finger on the issue when he said that the Bill is part of a package. It is part of a plethora of reforms to our constitution which have been pushed by pressure groups, including Charter 88, to which I have alluded before in this Chamber, which has a minority of academics and lawyers as members. It is highly organised. According to its advertisements in the newspapers, it has 80,000 signatures. It was foolish enough on one occasion to reveal that 1.5 per cent of those signatures came from social groups four and five. So we are dealing with a highly organised body which bounced the Labour and Liberal Democrat parties into constitutional change. At the time, I warned that the result of that would be that we should have an increasing amount of litigation. I made that point in particular when the human rights legislation was passing through the House.
	In the Daily Telegraph of 30th March the headline was:
	"Warning on Euro rights 'panic'".
	Jack Straw was addressing a meeting of the Institute of Public Policy Research. He said:
	"There is no need to get panicked about this".
	The article goes on to say that one of the people behind the scenes in Whitehall--we know that there are a few of those--said:
	"It's a litigants' charter. The lawyers will make a fortune".
	Private hospitals, schools and security companies are said to be panicking over the introduction of that legislation which will bring a flood of claims.
	That is not the only area in which that could happen. In 1995, I spoke in your Lordships' House on the question of single-issue groups. I expressed my fear then that the constant working up of grievances in society, with the suggestion that legal action is the answer, will cause us all a great deal of anguish.
	I gave the example of an appointments card which I had from the Chelsea and Westminster Hospital. I turned it over and it said:
	"Had an accident? Road accident, accident at work, tripped on the pavement? You may be entitled to compensation",
	and it gave the name and address of the firm of solicitors. That was a hospital appointments card. No doubt the hospital had a vested interest in promoting that sort of thing.
	But matters are growing worse. That was 1995. Noble Lords have probably watched commercial television and seen the advertisements by Claims Direct which say that if you have had an accident and so on, you may be entitled to get compensation. You telephone and are given examples of successful cases. The financial section of the Mail on Sunday has a "new issue alert", which I read religiously for purely academic interest. Recently, it featured the fact that one of the new issues coming to the market is Claims Direct, the estimated capital value of which was £150 million. That is a value of £150 million for that company whose adverts are seen on television. The figure has been increased over the past two issues to £200 million plus, which comes out of exploiting people's anxieties over such matters.
	The other side of the coin is that if the litigation culture grows much worse no one will go into the caring professions. Yesterday's Sunday Telegraph carried the headlines,
	"Old NHS wards used in nurses' homes crisis",
	"Police shortages leave 999 calls unanswered",
	and the Times Educational Supplement this week:
	"Recruitment crisis spurs ministers to offer postgraduates up to £10,000 a year".
	No one will go into the caring professions if we continue piling on legislation in all areas.
	The spin doctors have placed an emphasis on donations, a topic that was all worked up before the last election. One of the subjects which has not been properly explored by the Neill Committee is the abuse of charitable funding for political purposes. I raised the issue in a Question in your Lordships' House about the Pilgrim Trust on 13th March 1997. I asked for an investigation to ascertain:
	"whether the grant by the Pilgrim Trust towards the funding of the Constitution Unit is compatible with the trust's status as a registered charity".--[Official Report, 13/3/97; col. 425.]
	The Minister said that he would pass the matter on to the Charity Commission. The noble Lord, Lord Jenkins of Hillhead, then spoke, because he was a trustee. He said that,
	"the implication of the noble Lord's Question that the Pilgrim Trust and the Constitution Unit are politically motivated bodies is an example of the extraordinary malign fantasies which occasionally seize the mind of the noble Lord, Lord Cocks".
	I put that unsolicited testimonial beside the two accusations of being like Senator Joe McCarthy which have come from the same Benches, but not from the same noble Lord.
	The Minister went on to say that he would pass the matter on, but I then asked him about my inquiry about the Charter 88 Trust. He replied,
	"The inquiry is soon to be finalised. I understand that emerging findings are that the trust will be required to clarify and, where necessary, review and revise its relationship with other organisations".--[Official Report, 13/3/97; col. 426.]
	In other words, to put it bluntly, the trust had been rumbled. It was abusing its position and the matter had to be put right.
	A question has recently arisen over the matter. On 20th March this year I received a Written Answer from the Government. I had asked them to,
	"publish in the Official Report a table stating which government departments have used Electoral Reform Ballot Services in each of the past six years".
	The Answer I received from my noble and learned friend Lord Falconer stated,
	"Information in the form requested is not held centrally by departments and could only be obtained at significant cost".--[Official Report, 20/3/2000; col. WA10.]
	There is the old chestnut about significant costs, but in that case I found it entirely unconvincing. When I was Chief Whip in government in another place, I knew that if I had asked my staff for that information I would have received it within hours. I was extremely concerned about the matter.
	What have we found since? The Electoral Reform Ballot Services organisation boasts in its brochure that,
	"The Society has an unrivalled reputation for independence, integrity and impartiality which has been built up over the past 100 years".
	It goes on to state that it has won major contracts from the Government and that it has,
	"successfully tendered for a major contract from the Department of Education and Employment to run ballots on the future of Britain's remaining 166 Grammar Schools".
	Substantial amounts of money are paid by the balloting services into the Electoral Reform Society's coffers; well into six-figure sums in dividends. It receives also money from two other commercial units in the Electoral Reform Society's structure. That is taxpayers', the general public's and trade unions' money going into the Electoral Reform Society to propagate a massive programme of constitutional change. I feel that that is particularly pertinent because currently, as we know, in Scotland the businessman Souter wished to run a referendum and was in negotiation with the Electoral Reform Ballot Services, which has suddenly pulled out.
	The editorial of Friday's Daily Record states,
	"The name of the Electoral Reform Society has become a byword around the world for integrity, fair play and democracy.
	But not any more".
	It then goes on to criticise the way in which support for the ballot has been pulled out on grounds which it claims are extremely thin. I shall not weary the House with any more of it. But if a reputable organisation such as that suddenly caves in to what must be some kind of political pressure, it undermines the integrity of the entire political system. If we are talking about getting individuals interested in supporting and running our democratic system, that kind of example simply will not do. I hope that we shall keep the Bill as simple as possible and explain to people that it is meant to help them and not to hinder them and threaten them with a lot of penalties.

The Earl of Onslow: My Lords, we have come quite a long way in this country since Lord Holland could, as Paymaster-General for Forces, take the army pay, put it on deposit for his own account and pay the army at the end of the Seven Years' War, having retained the interest to his own benefit. We have come a long way even from Clive of India, who, when surrounded by piles of gold moidores, pieces-of-eight, rubies and diamonds beyond price, lakhs of rupees beyond count and accused of helping himself from Mir Jaffier's treasury, said, "Gentlemen, I stand astonished at my own moderation".
	We have even come a long way from, or never went near, Talleyrand who, when appointed French Foreign Secretary, is reputed to have rubbed his hands together and said, "Une fortune immense, une fortune immense". That story was possibly invented by Madame de Staol, who did not like him. We are not at all near to the shenanigans up to which Chancellor Kohl has been seen to be got.
	That applies even to Mr Hamilton, who is reputed to have accepted 20 grand from our Egyptian friend. The reason our Egyptian friend got cross with him was not because he accepted the 20 grand, but because he refused to have anything to do with him after he became a Minister. The point I am trying to make is that actually we live in a fairly nice, non-corrupt society. We should always bear that in mind. We should bear it in mind too because we have an active media who keep us politicians more or less up to scratch--although they do not always tell the stories about how badly they behave at media award parties; or of how one member of the press is seen to get rather drunk, which I suppose is human nature. I believe that we can be thankful--I nearly said, "to ourselves", but that is too smug--that we have a rather nice and uncorrupt society.
	I accept that the Bill is probably necessary because of the great cries of sleaze, and this and that, and the third thing which went on before. But when we compare that with what happened under Holland or Clive, we see that the element of sleaze was so small. When I was at Eton, there were two members of my house--one was David Sainsbury, the other was me--neither of whom were ever considered a possibility for government office. They were wrong about one and right about the other. But I do not have a supermarket chain behind me.
	There have been other examples of people who have handed out money for the privilege of sitting on your Lordships' Benches. It almost always works out that they have spent their money quite well and they have made a contribution. But I am still sure that the Bill is needed because of the climate in which we live.
	I have but two points to make. One is the point made by the noble Lord, Lord Cocks, and other noble Lords, about the commissioner having to be basically someone who cannot have thought anything at all. Three Speakers of the House of Commons were members of my family. They were all to begin with rather gutsy politicians. They then became impartial Speakers. One of them admittedly had to be stopped by the House of Commons for fighting a duel, but then he was made the first Baron Onslow and that is why I am here indirectly, so I thank him for that. Then there was Lord Selwyn-Lloyd, who was hated for his pay pause and for being Foreign Secretary at the time of Suez. Lord Tonypandy was fairly Left-wing in his youth, but he became an excellent Speaker. It is perfectly possible for party politicians to become impartial even when they have had jobs that have required them not to be. There are many examples of that.
	I refer, with delicacy, to the fact that since November--when noble Lords were made newly legitimate by Mr Anthony Blair--your Lordships' House has been able to argue more strongly with the Government. I believe that it is right that the House should do that. On this Bill, we must be careful how we argue with the Government for the reasons to which I alluded earlier.
	I was encouraged by the noble Lord, Lord Bassam, which is a one-off if ever there was one! In his speech he indicated that he would listen to argument. That is vital if the House is not to be difficult over some of the amendments. I hope that we shall not have to argue seriously with the Commons over anything as it will be difficult for us to argue on this matter.
	I have one major reservation. For the sake of argument, let us assume that Mr Reagan--unfortunately, he is not well--or conservative American friends give money to the Conservative Party, but that, however, would be illegal. It would be illegal for Mr Clinton's Labour friends to give money to the Labour Party. Those two parties, which are loyal subjects of the Crown, do not advocate bumping off soldiers or the forcible removal of a border. However, it will be perfectly possible for Noraid to give financial help to Sinn Fein, whose stated aim is to alter the boundaries of the United Kingdom and to force a change of sovereignty.
	Are we to allow people who advocate such behaviour to accept foreign donations, when people like Mr Anthony Blair or Mr Hague, who are loyal subjects of the Crown and who wish to work within our system, will not be allowed to receive subsidies from their foreign friends? I have a major difficulty with the fact that those in Northern Ireland who advocate armed rebellion should receive foreign subsidies.
	It is not quite within living memory--although nearly within the living memory of the Queen Mother--that an Irish Home-Ruler was elected in Liverpool. Sometimes Irish politics spills over into this country. However, I give this Bill my support. I hope that the noble Lord, Lord Bassam, will be as reactive and constructive in the light of criticism as he has been constructive in some of his remarks today.

Lord Beaumont of Whitley: My Lords, I am highly qualified to bore your Lordships into the ground on this Bill. I am an ex-major benefactor of a political party; an ex-treasurer; an ex-full-time organiser of a political party; and the man responsible for having unleashed the rampant national political party spending on election advertising when I sought counsel's opinion as to whether the law was as the other party believed it to be. In addition, like, I imagine, a number of people in your Lordships' House and certainly the noble Lord, Lord Rennard--if I libel him in his absence I am sure that the noble Lord, Lord McNally, will advise him of it--I have cheated on returns of by-election expenses and thereby achieved getting people into Parliament who have served satisfactorily as Members of Parliament for a long time.
	I expect that we shall have a long Committee stage and probably a long Report stage when all such matters will come out. I am afraid that we shall be kept very late at night for a long time. There is a great deal to be argued about, and I shall play my part.
	Tonight I merely want to touch on a couple of matters which affect my present party. The Green Party welcomes this Bill as part of the loosening up of the constitution which we see as the most obvious benefit that we can acquire from this Government. We have possibly lived too long in,
	"A land of settled government,
	A land of just and old renown,
	Where Freedom slowly broadens down
	From precedent to precedent".
	That is all very well in its way, but it is a recipe for the hardening of the arteries. If we want the blood of democracy to flow freely through the veins of the country, those arteries have to be softened.
	To say that we give the Bill a general welcome is not to say that it is perfect. I hope noble Lords will forgive me if I reflect for a moment on the two elements that my party finds particularly interesting and which it would like to amend. In Clause 11 a "registered political party" is regarded as,
	"'represented' if there are at least two Members of the House of Commons",
	who satisfy the conditions. We would widen that to deem it as represented if there are at least two Members of the European or Scottish Parliaments or the Welsh or regional assemblies. If we can obtain the level of voting that we achieve in fairer systems than the "first past the post" system--two representatives of a very high calibre in the European Parliament--we believe that we should qualify for fair treatment under this Bill, even under the unfair electoral system in place at present. We intend to try to amend Clause 11 and possibly add a new clause after it to that effect.
	My party is interested in the debate about donations from Europe. I do not yield even to the noble Lord, Lord Shore, in my opposition to the euro and the single currency. I believe that is an absolutely dreadful thing, and I hope that we shall succeed in resisting that for ever. However, while we are in the European Union, I believe that there is little moral reason why there should be a prohibition against various parties of the same persuasion helping each other across national boundaries. I do not understand such a prohibition. There are a large number of representatives of the Green Party in the European Parliament.

The Earl of Onslow: My Lords, are they gnomes or elves?

Lord Beaumont of Whitley: My Lords, did the noble Earl say, "name them"?

The Earl of Onslow: My Lords, I said, "Gnomes or elves".

Lord Beaumont of Whitley: Oh, my Lords, but not fairies! I beg your pardon. That is politically incorrect and I hope that Hansard will remove it from the record. We have fellow representatives of the Green Party in Europe and I believe that it would be ethically and morally reasonable for there to be a right for parties to donate to each other. They have more representatives because they have in place a fairer electoral system. We have more votes, but fewer representatives. Such discrepancies occur across national boundaries and I look forward to a detailed discussion of this point in Committee. I am far from clear on which way to make a decision, but it is certainly a point that needs to be looked at carefully.
	With those exceptions, I look forward to devoting the immense amount of time that will be required to improve the Bill in Committee. It is a good Bill and we are in favour of it, but undoubtedly it is far too complicated and needs amending in various ways. I hope that we shall be able to do so.

Baroness Fookes: My Lords, I was deeply impressed by the exposition of the noble Lord, Lord Neill, on the work of his committee. He set out the five key points with admirable clarity and simplicity. However, I wish that they had been more fully reflected in the Bill before us today, because there are certain policies which have not been adopted by the Government. Furthermore, the Government have put such detail and over-elaboration into the Bill that I fear that it may fail in its purpose, or at least not succeed to the extent that we would all wish for it.
	For a politician, my noble and learned friend Lord Howe was extraordinarily frank in his contribution. He said that over-elaboration in some legislation for which he had been responsible, or at least partially responsible, had led to a certain amount of failure in the Acts concerned. I think he was absolutely right to make that point. From my own experience I can remember some of the Bills that he mentioned.
	We have a more recent example in the working of the Child Support Agency. No one could quarrel with the principle; namely, that absent parents should contribute to the upbringing of their children. However, in the end, over-elaboration of the requirements led to a bureaucratic nightmare. We saw chronic delays in the system and fathers wriggling out of their responsibilities. A simpler scheme might have dealt with the matter far better, even if it had been a little rough and ready. That is the kind of situation that I fear for this Bill.
	I am appalled at the number of offences that are to be created, as well as the number of penalties that could be imposed. I believe that the noble Lord, Lord Cocks of Hartcliffe, was absolutely right to point out that the average voluntary worker going into a committee room in an ordinary constituency will take fright and rush out again if he or she sees such rules and regulations. Instead of encouraging participation in the political process through political parties and enhancing democracy, I fear that the Bill will in fact have the opposite effect. This point worries me very much.
	I think that many people will agree that the Bill attempts to tackle too many subjects all at once. In my view it would have been better to have addressed only the key matters such as the origin of donations and the amounts concerned. It could then have been left to the electoral commission--which I believe to be a good idea--to work out in easy stages what matters it felt were appropriate for further legislation. Indeed, that is provided for under Clause 5, where the commission is asked to keep under review a number of matters and to make reports to the Government. After that, presumably, further legislation could be enacted. In my view it would have been far more sensible to pay greater attention to that rather than attempt to deal with the whole gamut of subjects that are contained in this extremely long Bill.
	Many noble Lords have discussed the matter of referenda this evening. I hope that your Lordships will forgive me for using the old-fashioned term--I cannot get used to saying "referendums", any more than we might say, "agendums". Because the hour is late and others have dealt adequately with the matter, I shall not go into any detail, save to say that, like several other noble Lords, I dislike the system intensely. I believe that it is virtually impossible to formulate neutral questions that can be answered properly with a simple "yes" or "no". Even if it is possible to do that, I am distinctly disconcerted by the detailed administrative arrangements set out in the Bill. The situation seems to me to be far from satisfactory, especially as regards the issues of whether there should or should not be a limit on expenditure, the role of the Government in promoting their own case, and time limits. As I have said, others have dealt with these matters in some detail and I agree strongly with the points that have been made. I hope that we shall think long and hard before these provisions are allowed to go through unamended.
	I should like to make one final point which I believe may be the only one that has not already been touched upon in the debate today. Oddly enough, it relates to what is not in the Bill. I refer to a section in the Representation of the People Act 1983 which, in effect, allows a single candidate in an election to veto an appearance in a broadcast. All the candidates have to agree to the broadcast. I personally came across this as a candidate on more than one occasion. It irritated local broadcasters no end, with good reason. Even if a minor fringe candidate--only one candidate--said, "No, I do not wish to take part", lo and behold, the entire broadcast was cancelled. I cannot think that that is a democratic way of proceeding. Since almost everything else has been touched on in the Bill, I was surprised to see that this relatively simple suggestion was not taken up and dealt with. I hope that, in Committee, we shall be able to look at this point.
	In common with others, I believe that we shall need a long Committee stage because there is a great deal in the Bill that must be discussed. No one could object to the general spirit and principle of the Bill, but certain provisions go far beyond that and I believe that there are significant weaknesses that we shall need to address. However, given the lateness of the hour, I shall forbear to say more.

Lord Stoddart of Swindon: My Lords, I am a little sorry and indeed a little worried that the noble Baroness, Lady Fookes, has adopted such a pessimistic attitude towards the Bill. I wish to welcome it as a Bill that deals with some anomalies that have long been overdue for correction. However, now I am anxious about whether I have read the Bill correctly because I believe that it will help to increase public confidence in our political institutions, rather than the reverse.
	As the noble Lord, Lord Mackay, and others have pointed out, in many respects the Bill departs from the Neill report. One of those departures is the proposal to establish a Speaker's committee. This was certainly not envisaged by the report of the Neill Committee. I have some doubt about the desirability of establishing a committee of Parliament to oversee the work of what is meant to be an independent commission. On the one hand, it is stated that the electoral commission must be independent and that no politicians may serve on it--apparently politicians are pariahs these days, although it is they who engage in the rough and tumble of politics--but on the other hand, a committee is to be established that will provide for politicians to supervise the commission. That is quite ridiculous. We shall need to examine this provision, especially when it appears that, as envisaged, the Speaker's committee will be weighted in favour of the government of the day. I doubt whether any Member of this House would welcome such a move, except perhaps those on the government Front Bench.
	I have a number of other questions that I shall raise later in my speech. One provision which I welcome limits expenditure by political parties on a national basis. That is something which I very much welcome, because expenditure at national level really is getting out of hand. I believe this provision will help to reverse this trend at general elections and indeed at some other elections to prevent them becoming just another media show which is played out by elite broadcasters and elite politicians.
	There really is a need to get back to real electioneering at constituency level, face to face with the electors. That is what politicians should be doing, getting down to constituency levels--at public meetings, door-to-door canvassing, open air meetings--and we must get back to making MPs attend meetings at which they can tell their constituents what their policies are about and what they are going to do so that people can see what kind of persons they are. That will enable them to be questioned by those whom they are asking to represent. I believe it is about time that Members of Parliament became responsible once again and answerable to the electorate, rather than to the leader of their party.
	Before passing on to referendums, I should like to ask for an assurance from my noble friend the Minister that the new arrangements for the registration of political parties cannot lead--I repeat, "cannot lead", not "may not lead"--to draconian conditions of legislation that would prevent new entrants coming into the political field. I really do hope that we can get that assurance.
	I should now like to turn my attention to referendums, and I am particularly concerned that they should be made absolutely fair to the contenders in any referendum there may be. There certainly has been no fairness in many referendums that we have had so far, notably in the 1975 referendum as to whether Britain should remain in the Common Market. It was estimated in The Times that at least 20 times the money available to the Opposition, to the No vote, was available to be spent by the Pro campaign. That really cannot be right. I hope this Bill will prevent that sort of thing happening again. Furthermore, at that time the Government engaged themselves on one side of the argument--the Pro side that is--and used taxpayers' money to promote that argument. They also issued an official pamphlet supporting continued membership, which went out together with another pro-Common Market pamphlet, and only one "anti" pamphlet. The noble Lord, Lord McNally, remembers it well. Thus the Yes case was financed by millions from private sources and from the taxpayer's pocket. The media were one-sidedly "yes" and the government machine was also on the side of the pro-Common Market lobby.
	Under this weight of one-sided advocacy it really was quite remarkable that 33 per cent of the British population still voted to come out. That is a lesson which some of us remember well and have learned well. It seems indeed that even the Government might have learned something from it as well: and so they should, because this sort of one-sided government intervention has occurred very recently, in the case of the Northern Ireland referendum on the Good Friday Agreement, where the civil servants certainly became involved and the Government became highly involved. They got the result they wanted.
	They also got the result they wanted in the Welsh Assembly elections, where public money was used ad lib on the Yes side, whereas one individual had to finance the No campaign. It was quite outrageous: and even after all that the Welsh decided by only 6,000 votes that they wanted this awful assembly which they are now saddled with. If there had been a fair referendum there is no question that the Welsh, quite rightly, would have discarded the idea of an assembly which does them no good and which costs them a lot more. So the Yes case was financed by millions from public sources and the No campaign got nothing.
	I hope that the provisions of this Bill will at least help to remedy the situation I have just described, but there are still some worries that must be addressed. The Government machine is to be partly restricted for only 28 days before the date of the referendum. That, as has already been pointed out, is too short a period. Even then, as I understand the Bill, they will be able to issue factual information--I put that in inverted commas: "factual information"--because if some of the "factual information" on the European Union being issued at the present time by the Government is anything to go by, then "factual" has taken on an entirely new meaning.
	Then there is the question of spending during the period of the referendum campaign. Why did the Government ignore Neill's view that there should be no undue restriction? Another question is indeed the question itself, as has already been raised from the Benches opposite. Who is to decide the question and say whether it is a fair and balanced one which voters can understand and answer properly?
	Finally, should all referendums be decided by simple majority or should constitutional matters have to be decided by, say, a 60 per cent majority or, as in the case of the 1979 Scottish referendum, by a 40 per cent vote of the total electorate rather than those who voted? There are some serious questions to be answered, and among them is the matter of whether Parliament should take a decision before a referendum rather than afterwards.
	This is an important point, since a decision by Parliament in advance could, first of all, sway the result in many ways and not least by causing a feeling among the people who might be engaged in the election and could engender in them the view that "they up there--them, the parliamentarians--have decided the question anyway and so it really does not matter what we say". As I have said, there are still many matters to be discussed and resolved at Committee stage.
	There is one final issue that I should like to raise, which is the question of television and radio coverage. Although equal broadcasting time will be given directly to the contenders in any national referendum to get over their message, outside that the broadcasters will be able to engage in the issues and the arguments at will. They are of course supposed to be impartial, but doubt is bound to arise in the light of some recent disclosures. First, there was the BBC radio programme on 3rd February this year which dealt with the turn-round of opinion about the Common Market in the early 1970s. I do not know whether any of your Lordships heard it, but there were a series of regular breakfasts and the sort of thing that went on there was quite amazing. I really must read one or two of the extracts from the summary of the broadcasts. The speaker was a Mr Tucker, who was the head of the Foreign Office Information Research Department. He said:
	"We decided to pinpoint the "Today" programme on radio... So round the table came people like Marshall Stewart, who was the brilliant editor of the "Today" programme, which was a key programme, and they sat down with people who were actually negotiating in Brussels. During that time we achieved a thing we couldn't have achieved today, which is we got an extra five minutes on the ITN news in the evening added on which was purely informative."
	The interviewer said:
	"And that five minutes came out of a direct negotiation with Nigel Ryan who was the editor of ITN across one of those breakfast tables".
	The answer from Mr Tucker came,
	"Yes across one of those breakfast tables. It was a wonderful, wonderful news opportunity. Even Alistair Campbell could not have done better I feel".
	That is what was happening at that time. Then we come to this gem:
	"Tucker: Jack De Manio was a presenter who was terribly anti European and we protested privately about this and he was moved ... Ian Trethowan listened and De Manio was replaced".
	It was also disclosed that not only were the British Government involved, but also the CIA. Dr Richard Aldrich, who teaches in the Department of Politics at Nottingham University, was astonished to discover that,
	"the [Washington] library had the entire archive of a CIA front organisation which documents from start to finish funnelling millions of dollars into Europe, into Britain, with all its accounts, with all its receipts with correspondence for example from British Labour MPs to individuals in American intelligence organisations".
	We must ensure that that sort of thing does not happen at future referendums. The BBC and ITV are supposed to be impartial. But I understand that those breakfasts are still going on at the present time. We need to ask whether James Naughtie and John Humphreys attend those breakfasts. And we are entitled to an answer.
	My last point concerns the behaviour of broadcasters during the recent European elections. Global Britain, of which I am chairman, commissioned a report from the Minotaur Monitoring organisation. It discovered that the broadcasters failed adequately to cover the Euro elections, and indeed played them down, which was certainly the policy of one political party. They gave inadequate coverage to parties of the sceptical tendency. They were boosting the campaign of the breakaway Tory candidates and emphasising the split in the Tory Party while at the same time ignoring the Euro-realists in the Labour Party.
	There ought to be a full inquiry into the role and behaviour of the BBC and ITN. If that is unlikely, perhaps when the freedom of information provisions come into force they will enable us to ask questions as to what is going on and how we can have much fairer coverage not only of the European Union issue, but also of other issues in the broadcast media.
	As I said in the beginning, the Bill will be helpful and I shall certainly follow it closely through Committee.

Lord Willoughby de Broke: My Lords, I shall be mercifully brief and limit my remarks to that part of the Bill involving referendums, in particular the proposal to regulate third-party campaigning bodies and their spending limits.
	Under Clause 111 and Schedule 13 the Bill will impose limits on what a designated campaign group may spend. That is currently set at £5 million. Schedule 9 specifies that the spending limits will apply for the year before an election. As noble Lords have said, those proposals are not entirely consistent with the Neill report recommendations, which specifically ruled out any time period and recognised the difficulties of imposing a spending cap. The proposals in the Bill, far from being fair, appear to be designed with the express purpose of tilting the balance in a referendum in favour of the euro.
	We have been promised a referendum on the euro and, under the Bill as it now stands, any anti-euro campaign groups would be limited to spending £5 million in the year before a general election is announced. As my noble friend Lord Mackay of Ardbrecknish said, that would be perfectly all right if Parliament had a fixed term; then everyone would know where they were. But Parliament does not have a fixed term. So how do third-party campaigners know when the button has been pressed and the year-clock starts ticking? The answer is that they will not know until the Government call an election.
	In other words, the 365-day period during which expenditure will be controlled, as set out in the Bill, will be known retrospectively. That seems very unfair. Any organisation which spends more than £5 million during the year preceding an election will be liable to criminal proceedings under the proposals in the Bill when it could have no certainty as to when the period started during which it was spending money. That is retrospective legislation at work.
	The noble Lord, Lord Shore--ever the optimist--said that that provision would be knocked out at Committee stage. I trust he is right and I hope to be here to help knock it out. But the Government's answers in another place when this matter was raised were not wildly encouraging. Members of the other place were told that campaign groups could avoid committing an offence by operating to expenditure limits during any 365-day period. That effectively limits them to any 365-period whether it is one, two or three years before the election; in other words, they will have to limit their spending to £5 million during each 365-day period.
	Even less helpfully, the government spokesman in the other place at Report stage suggested that third party campaigners might like to make what he called an "educated guess" as to when a general election might be called. What is an "educated guess" as opposed to an uneducated guess? We do not know. But those who make educated guesses are probably the same people who suggested that the euro would be a stable and hard currency. They have not been awfully clever so far.
	The third-party campaigners are being asked by the Government to guess whether or not they will be committing a criminal offence, for that is what the Bill will charge them with if they spend more than £5 million in any 365-day unspecified period. That is not good enough. I hope that amendments will be tabled to make this part of the Bill much fairer.
	Another area of concern, as the noble Lord, Lord Stoddart, mentioned, is the ban on central and local governments campaigning during the 28-day period prior to an election. The noble Lord, Lord Neill, mentioned that in his report, saying that the 28-day period did not go quite the whole way. From that I infer that he would have preferred a longer period of abstinence from government campaigning so close to a general election. But, as the Bill stands, the Government will be able to push the case for the euro virtually up to the election, while other organisations will be regulated for up to six months before an election.
	All this looks as though the Government are trying to rig the rules governing a referendum in their favour. They have already spent some £29 million on the euro preparation programme. As my noble friend Lord Lamont pointed out, they can issue discussion papers and pro-European propaganda disguised as information; they can issue documents such as the national hand-over plan. If the Bill remains unamended, the Government will be allowed to spend whatever it takes, for as long as it takes, to push the case for the euro while organisations which campaign against the euro will be subject to legal spending limits, time limits, retrospective legislation and even imprisonment.
	Many speakers have said how keenly they are looking forward to the Committee stage in spite of the threats of my noble friend Lord Mackay to read out numerous schedules. I hope that I shall be able to join the party. Although the Bill has its good parts, the part dealing with referendums needs to be improved radically before the measure is returned to another place.

Lord Rennard: My Lords, this has been a good debate about the health of our democracy. The measures proposed in this Bill are a prescription from the Committee on Standards in Public Life. They arise from a generally shared diagnosis that something is rotten in the state of our politics when it can be seriously suggested that money can buy undue influence in an otherwise democratic system.
	There appears to be widespread consensus that the committee chaired by the noble Lord, Lord Neill, prescribed the right kind of medicine. I refer to national limits on party spending; transparency and openness about where the money comes from to finance political parties; and an independent electoral commission to take much of the responsibility for initiating and overseeing changes to our electoral machinery out of the hands of the governing party and the parties themselves. There may, however, be some disagreement about the dosage of the medicine. Some of us may believe that a few extra drugs should be prescribed in addition.
	It was the issue of funding, the constant scandals which surrounded the previous government and the addition of the word "sleaze" to our common political vocabulary which led to the formation of the Committee on Standards in Public Life--initially under the guidance of the noble and learned Lord, Lord Nolan.
	I do not believe, however, that the problem in this country is as bad as it is in, for example, the United States of America, to which many noble Lords have referred in this afternoon's debate. In America the huge costs of modern campaigning, especially through TV advertising, force candidates and legislators to devote more of their time to chasing money than to campaigning for the votes of the ordinary citizen or to doing their job of legislating. Indeed, it is estimated that a US Congressman will need to raise 12,000 dollars each day he is in office simply to stay in office. The need to raise such huge sums has a corrupting influence.
	Therefore, as the noble Lord, Lord Neill of Bladen, argued in his report, and this afternoon, the time has come to call a halt to our own party political "arms race" before we all fall further into the trap into which politicians in the United States have already fallen, and where there is considerable disquiet but little action on the subject of campaign finance reform.
	In this country, our laws to prevent the widespread buying of the ballot date back to 1883 when campaign expenditure was almost wholly at the constituency level with virtually no national expenditure by national party organisations. There were many scandals at the time with the purchase of constituencies. Some of your Lordships may remember the famous episode of "Blackadder" in which the late and much missed Vincent Hanna reported from the by-election in "Dunny on the Wold" where Lord Blackadder had bought the seat by purchasing the vote of the only person entitled to participate.
	The political corruption scandals of the 18th and 19th centuries were largely ended--as the noble Baroness, Lady Gould of Potternewton, pointed out earlier--with legislation against bribery, the introduction of the secret ballot and the introduction of constituency expenditure limits. But our electoral laws have scarcely changed in many ways since 1883, while the way in which elections are fought has changed considerably. For many years the constituency limit, together with rules making it illegal to hire canvassers or vehicles to convey voters to the poll, helped to prevent a rich candidate or party from effectively buying a seat.
	However, elections are no longer fought primarily at the constituency level. If we look at the increase in spending at national level by the Conservative Party over the past 25 years, we see how things have changed and we can look ahead to the problems we may face in future unless we act now.
	In each of the 1974 elections the Conservative Party was calculated to have spent less than £100,000 on its national campaigns. By 1979, with the services for the first time of the noble Lord, Lord Saatchi, in charge of advertising, the Conservative Party is estimated to have spent £2 million nationally. By 1983 the sum was £4 million; by 1987 it was £9 million; by 1992 it was £11 million; and by 1997 it was a staggering £28 million.
	Of course, I have heard some politicians argue that this money simply does not buy votes. But why then would the parties seek to raise and spend such huge sums of money? I can tell your Lordships that it is not simply for fun. The requirement for political parties to raise funds on this scale encourages a most unhealthy syndrome of dependency on a few very wealthy individuals. It strikes at the core of the democratic principle of one person, one vote, if we reach the point at which £1 million brings about a change in policy which millions of votes have failed to achieve.
	The dependency, for example, of the Conservative Party on the tobacco industry to provide advertising sites during the 1992 general election cannot have encouraged that government to tackle the problem of the 300 people who die every day from tobacco-related illnesses, or the burden which that habit places on the NHS. It was not without reason that the Labour Party was advised to return the £1 million donation from Mr Bernie Ecclestone, following its delay in banning tobacco advertising from Formula 1 events.
	Parties should be free from pressures to seek contributions of this kind. Therefore, the core proposal of a maximum expenditure limit in general elections is a welcome one. However, the precise limit needs to be considered carefully.
	The current proposal for a national limit is calculated on the basis that for every seat fought there should be £30,000 of allowable national expenditure. Therefore, for a party fighting virtually every constituency, the limit will be nearly £20 million. But the limit for constituency-based campaigning will remain at about £8,000 per seat or an aggregate for all constituencies across the country of about £5 million.
	It seems to me that the balance is wrong when four times as much money can be spent on national campaigns as on the constituency campaigns. It cannot be fair that a candidate is effectively prohibited because of electoral expense limits from placing an advert in his local paper explaining why people should vote for him while candidates from richer parties are able to benefit from huge national advertising campaigns, full-page advertisements in national newspapers, and expensive bill-board advertising. Ideally, I should like to see a national limit which matches the aggregate of the constituency limits. I believe that there is a strong case for lowering the proposed national limits and for increasing the amounts which can legally be spent in constituencies.
	Many of the reasons for which it is proposed to increase spending limits for parliamentary by-elections also apply to constituency campaigns in a general election. The same innovations in campaigning methods and technologies apply. It seems to me that the disparity between the constituency limit of about £8,000 and the proposed by-election limit of £100,000 is simply too great.
	Too much emphasis is put on the national campaign if £20 million is the national limit and only £5 million is the aggregate constituency total. I ask the Minister to look carefully at these totals and at arguments advanced in another place. Both Mr Martin Linton and Mr Andrew Stunell argued that £75,000 should be the limit for parliamentary by-elections; I agree. Furthermore, I agree with them that a notional national limit based upon £30,000 per constituency fought is too high. I think that the figure of £22,500 which they suggested is quite high enough. But I would reduce this further and increase the constituency limits to, say, an average of between £12,000 and £16,000.
	However, there is more to ensuring a level playing field in elections than introducing national expenditure limits. A system in which two parties can raise and spend £20 million each and their nearest rival--with more than half the support of one of them, and almost half the support of the other--can raise and spend only £3 million hardly seems like a fair fight. My noble friend Lord McNally earlier made an eloquent case, as ever, for state funding.
	I should perhaps declare an interest in this subject as the director of campaigns and elections for the Liberal Democrats. The noble Lord, Lord Cocks of Hartcliffe, referred earlier to the previous Labour government's attempts to implement the Houghton commission report. I regret that they failed on that occasion.
	I also remind the House that it was not long ago--in 1994--that the Labour Party, in opposition, argued in its evidence to the Select Committee on Home Affairs that there should be an element of state funding for political parties and that the public were prepared to pay for this. But even if, as I accept, the public are not delirious about the prospect of paying a small contribution to make democracy work, I believe that they would consider that more attractive than the alternative proposition of having our democracy depend on the favours of a few millionaires.
	In evidence to the Neill committee, my party argued that £50,000 was quite enough for any one individual to donate to a political party. Maximum limits for donations apply in many countries. If they applied here, I believe that a number of noble Lords to my left would have been spared their blushes last Friday morning. Only a sensible limit on donations will prevent the suspicion of money buying undue influence in the political process and thwarting the democratic principle that each vote has equal value. But sensible levels of campaigning will take place thereafter only if that funding is replaced to some extent by a modest element of state funding.
	So far, I have addressed my remarks to the issues of fairness, democracy and a more level playing field between the political parties. But there is, I believe, a greater danger in the Bill that, despite the best of intentions, the Government may unwittingly permit the proverbial coach and horses to be driven through their intention to make the rules on election spending somewhat fairer. The proposals for expenditure by so-called "third parties"--I do not mean the Liberal Democrats--intend to allow those who are not standing in an election to express their views on issues, for and against particular candidates. That is right and proper; to prevent them doing so would be in breach of Article 10 of the European Convention on Human Rights, but they should not be able to exercise disproportionate influence on a campaign through massive financial advantage over those who are standing for election.
	The attempt to subvert the democratic choice of voters in the recent Scottish parliamentary by-election through massive and misleading advertising highlights the dangers we face if people with more money than sense are allowed to spend disproportionate sums of money on trying to influence electoral outcomes. I therefore welcome the Minister's statement today that there will be a £500 limit proposed for such constituency expenditure. But there must also be a much smaller national limit than that currently proposed for third party expenditure in national elections. This will also help to prevent the so-called "cheating" to which the noble Lord, Lord Mackay of Ardbrecknish, referred.
	There are a number of other issues in the Bill which will require further examination. I refer in particular to the practicalities for the parties of implementing the detailed requirements for disclosure of financial information. I think that all parties accept the principles in the Bill, but as largely voluntary organisations, with significantly fewer staff than many civil servants may believe, it will not be as easy as they think to fulfil the very detailed requirements. In particular, there needs to be more understanding of the different ways in which parties organise. My own party has a federal structure, which is quite distinctive. I thank the Minister for confirming in his opening remarks that he is considering how this can be taken into account.
	As the Minister also indicated, we need to consider the genuine differences between sponsorship and advertising at conference events, and unconditional donations--up to a certain level of course. We need to define more carefully the differences between local and national expenditure so that it is clear who is responsible for what.
	In relation to the difficulties faced by all parties, I concur entirely with the comments made by the noble Baroness, Lady Gould of Potternewton, on this subject, and with some of the comments made by the noble and learned Lord, Lord Howe of Aberavon, the noble Lord, Lord Jopling, and the noble Baroness, Lady Fookes. I hope that in future the electoral commission will address some of these issues, but it may not have time to address them before the parties have to gear up for their new legal and financial responsibilities.
	I hope that the electoral commission will be a great success. Indeed, I look forward to the day when it will be able to go further than its initial remit and ensure that in future general elections we will have proper televised debates between the three main party leaders and between the four main party leaders in Scotland and Wales.
	The electoral commission will, I hope, ensure that our electoral laws never get so out of date again as lifestyles and technology move on. Civic education will be an important part of its remit. Impartial explanation of the political process is an essential prerequisite to encouraging participation and sustaining the health of our democracy.
	Taken as a whole, this Bill will help to cure some of the ills in our failing democracy. Let us make sure that the treatment provided is as effective as possible.

Viscount Astor: My Lords, the noble Lord, Lord Cocks of Hartcliffe, said that this was a Bill derived from the chattering classes and spin doctors. That may be the case, but it is a Bill from his Government's Front Bench. I do not wish to draw analogies as to who on the Government Front Bench is the spin doctor and who is a member of the chattering classes. I shall leave that to the noble Lord, Lord Cocks.
	While we agree with many of the principles in the Bill, it is long, badly-drafted and will no doubt be subject to a whole raft of government amendments even before we get to the Committee stage and before we on this side of the House have tabled any of our own amendments. Almost every noble Lord followed my noble and learned friend Lord Howe in complaining about the complication and over-elaboration of the Bill. My noble friend Lady Fookes showed how the Bill could discourage rather than encourage local involvement in politics.
	I am sure that there will be government amendments. We shall want to see them in good time. Perhaps I may plead with the Minister that the Committee stage will be after the Easter Recess so that there is ample time for debate. I hope that the Government will table the amendments in good time in order that we may consider them carefully. Indeed, that may give the Minister time to understand the complications of his own Bill. The number of days in Committee will be purely relative to the complication of the Bill brought forward by the Government.
	The noble Lords, Lord McNally and Lord Goodhart, want state funding. I thought it was rather interesting how much they spent at the previous election. I think that they said they spent £3 million. Compared with the percentage of the vote that the Liberal Democrats received, that was rather good. They did better than we did; they got more bangs for their bucks. They probably did rather better than the Government. I am not sure that they made out a case at all for state funding; they should carry on as they are. We have always been against state funding.
	The noble Baroness, Lady Gould of Potternewton, said we should not get too bogged down in detail but should stick to the principles. We are not going to get bogged down in detail today, but I am afraid we shall get terribly bogged down in Committee and at Report stage. But that is why we are here; that is what this House is for.

Baroness Gould of Potternewton: My Lords, I did not actually say that. I am sorry if I was not clear. I said that I hoped that when we discussed the detail we did not forget the principle.

Viscount Astor: My Lords, I accept entirely what the noble Baroness has said. We shall try always to remember the principles as we wade through the detail of the Bill.
	I turn now to some of the issues which derive from the Bill. The first issue is political party donations. We agree that blind trusts should not be used. They have been abused in the past; it is extraordinary how many prospective Cabinet Ministers suddenly turned out to have one. The two main points about donations amplified by the noble Lord, Lord Shore, are that there should be a disclosure of names and a limit on expenditure in elections. We agree with all of that.
	Turning now to something more difficult--that is, the electoral commission. The noble Lord, Lord Cocks of Hartcliffe, was concerned about membership. We agree. My noble friend Lord Norton is concerned about membership. It seems to us that membership should be open to include, for example, members of the judiciary. The idea that former politicians should be disbarred seems totally illogical. It is rather like asking Members of another place to come to this House, to forget that they are politicians and to sit on the Cross-Benches and have individual views. That does not make any sense. Many distinguished politicians and former politicians have been chosen by this Government and the previous Government to sit on commissions; they have carried out their roles with great impartiality and have done extremely good jobs. To disbar a whole number of people who have a wealth of experience is utterly illogical.
	My second point about the commission concerns the extraordinary power it will have under Clause 12. Clause 12 is extraordinarily wide-ranging. Under Clause 12 the commission can promote EU institutions. How can that be justified? After all, these institutions have their own vastly expensive PR machines and are quite happy to promote themselves. They certainly do not need our help.
	The commission is to have an educational role. The noble Lord, Lord Neill of Bladen, was concerned about overloading the commission with an educational role. Clause 12 does that. Indeed, subsection (4)(b) even gives it the power to make,
	"grants to other persons or bodies for the purpose of enabling them to carry out such programmes".
	What kind of "other bodies" could these be that the commission will substitute for its own role in education?
	That brings me to another point regarding the commission and the proposal in the Bill that we should suddenly be within or without 365 days of a general election. That proposal puts the Government in a totally privileged position. The noble Lord, Lord Shore, said that this was obvious nonsense. We agree. We shall certainly wish to return to this point at the Committee stage.
	Perhaps I may leave general elections and turn to referendums. My noble friend Lord Lamont, the noble Lord, Lord Harris of High Cross, and my noble friend Lord Willoughby de Broke were concerned about the clauses in the Bill on referendums. The central issue about a referendum is who decides the question and whether the question is fair. My noble friend Lord Norton said that the commission should have a central function. The Bill as currently drafted will allow the Government to gerrymander any referendum in favour of, for example, the euro. At the very least the commission should have to be consulted and perhaps should even have to approve or frame the question. It must be for Parliament to decide what the final question is, but surely the commission should have a role in that. The same applies to determining thresholds, turn-out and period issues. Surely the commission should play a part in determining that policy.
	The whole point of a referendum is that a party does not necessarily have a view and questions cross party lines. With regard to the previous referendum on Europe, parties were split in ways that were perhaps surprising when we look back to those days. The idea that there should be arbitrary limits, as set out in Schedule 15, is unfair. It should come under umbrella organisations. We shall have to look closely at whether EU organisations should be able to play a part and become permitted participants, as the Bill currently allows.
	Perhaps I may say a few words about broadcasters. It is surprising that the commission should not play a greater role in party political broadcasts and determining how many there should be. I understand that that has been resisted by both the ITC and the BBC. We know that in the past there have always been arguments about how long they should be and how many there should be. Indeed, the Liberal Democrat Party felt on one occasion that it had been left out of that process and complained bitterly. It would seem sensible to look at whether the commission should have a greater role in deciding what is fair. Very often the ITC and the BBC do not necessarily agree. We shall therefore want to look closely at Clause 10. We shall also want to look at advertising and poster advertising in general elections. Control of advertising has concerned many of those who have spoken in the debate.
	We shall want to look at other issues--for example, bequests, the definition of campaign expenditure, compliance costs, and Clause 94 and the order allowing the Secretary of State to make changes regarding referendums. My noble friend Lord Lamont is concerned about referendums and defining caps by political parties. We agree that it should be for umbrella organisations with regard to referendums. The Bill needs to be amended in that area.
	Perhaps I may now turn to trade unions. Trade unions are generally affiliated to the Labour Party--the Bill should recognise that fact but it does not--as are often co-operative societies, which, like trade unions, are major funders of the Labour Party. The Bill gives the Labour Party a way round the limits on campaign expenditure. Unions pay political levies. Unions are part of the Labour Party's nomination process. They have a vote in who is to be chosen as, for example, a mayoral candidate. Indeed, they have a vote in who is to be chosen to be the leader of the Labour Party. How can they be separate bodies as defined under the Bill? That cannot be right.
	My noble friend Lord Onslow is concerned about Northern Ireland. So are we. We believe that if Sinn Fein wants to be a credible political party it, too, should not rely on overseas donations when other parties cannot receive them. We know that in reality the Bill could be a cover for the funding of terrorist acts against our own people. We know that that could happen and we must guard against it. We shall want to look closely at this issue. The way that the Bill is presently drafted cannot be right.
	Perhaps I may come back to political funding and local treasurers. It seems to us that weekly donation reports are unnecessary and are far too burdensome. With the chaos of party machines, as it often is, during general elections, how can local treasurers manage to take control of this issue? Under Clause 62 the Secretary of State--I am reading from page 13 of the Delegated Powers and Deregulation Committee's report--may,
	"after consulting the Commission, by order, extend the provisions on weekly donation reports in relation to the specified election period in relation to one or more relevant elections".
	That means that the Secretary of State, by order, will be able to expand the provision. The point I am making is not a particularly Conservative Party one. It is the same for any local party. If we are going to encourage democracy, if we are to encourage people to come forward and play a part in local elections and if we are to encourage donations, we must have sensible rules. They must be enforceable, so they must be simple and straightforward. The rules in the Bill are not.
	That brings me to tax relief. All noble Lords were in favour of it, except possibly the noble Lord, Lord Cocks. Tax relief was recommended in the report. It would cost between £4 million and £5 million a year. That is what the Government spend on spin doctors. As we have heard, they spend £92 million on their advertising budget. There would be no great administrative burden. Tax relief would prevent state aid and not encourage it or be a substitute for state aid. The costs are so small in comparison with what has been raised by the Government's stealth taxes that the Government's reason has to be political and not fiscal. There can be no argument that it is a fiscal reason. It cannot be argued on budgetary grounds. In his report, the noble Lord, Lord Neill, encouraged the giving of small amounts. All noble Lords on this side of the House agreed with that. The Government are going to have to reconsider the matter.
	I turn now to company donations. There seems to be a loophole here, left by the Government for some reason, I know not why. European companies will be able to give money without restrictions. I hate to sound harsh to the Minister, but we all know how the socialist parties in Germany and elsewhere in Europe have benefited from company funding. I am sure that that is not the Government's intention, but they will have to tighten up that clause of the Bill. The noble Lord, Lord Shore, described the provision as driving a coach and horses through British politics. We agree.
	We have always wished to see the Neill recommendations implemented in full, not with parts missing. The noble Lord, Lord McNally, described the Government's thinking behind the Bill as, "It's now our turn to draw up the rules". I am afraid that that is only too true. The Bill has in part been written by a responsible Government; but in part, I am afraid, it shows too much influence of the party chairman and the Labour Party machine.
	I warn the Minister that if a clause is too complicated, if it is not understandable, and if the Minister cannot explain it, we shall have to look closely at amending it in Committee.

Lord Bassam of Brighton: My Lords, I spent Saturday evening--I cannot resist saying this because the noble Lord, Lord McNally, is present--in the company of a body of citizens who come under the heading, the National Society of Allied and Independent Funeral Directors. I held out great hopes for the society's annual banquet. I was given a very entertaining time. I wagered that this evening would not be so interesting or entertaining, but I have to tell noble Lords that they have matched the National Society of Allied and Independent Funeral Directors in every respect.

Lord McNally: My Lords, the last time the Minister addressed the House he had spent his evening reading the local government journal. Last Saturday, it was the funeral directors. For his own good, the Minister really has to give up life in the fast lane.

Lord Bassam of Brighton: My Lords, at least I have succeeded in one respect: I have brought some added levity to the proceedings.
	I take great encouragement from the debate. I enjoyed all the contributions in their different way. I enjoyed particularly that of the noble Lord, Lord Mackay of Ardbrecknish. It was witty and ingenious and up to his usual standard. We heard many important comments from the noble Lord, Lord Neill, who made a telling contribution. The noble Lord, Lord Jopling, displayed his command of the issues. The noble Lord, Lord Goodhart, helped greatly to advance the debate as a result of his work on the Neill committee, as did the noble Lords, Lord Rennard, Lord McNally and Lord Norton of Louth. I enjoyed also the contributions of the noble Baroness, Lady Fookes, and my noble friend Lady Gould of Potternewton. It is invidious to single people out, and wrong to do so, but all noble Lords made separate points and I shall try to deal with them as best I can.
	The debate was positive and constructive, reflecting what happened in another place. With some notable exceptions, particularly on tax relief, there was a large measure of support on all sides of the House. I stopped writing down the number of welcomes given to the broad swathe of measures set out in the Bill. That is as it should be for a Bill dealing with the regulation of political parties and with electoral matters. One consistent criticism, essentially from the Benches opposite but reflected in comments from other parts of the House, was that the Bill is elaborate. The noble Baroness, Lady Fookes, said that it was too much at once and other noble Lords said it was very detailed.
	There has been a failure to regulate in this area over many years. That is why we have a long, detailed, and, in some regards, complex piece of legislation to consider. No doubt the House, with its reputation for giving matters very close inspection and scrutiny, particularly in Committee and on Report, will seek to sort out many of the problems that we have perhaps imagined at this early stage in our discussions.
	The noble Lord, Lord Mackay, described the Bill as too bureaucratic. We recognise that there is a lot of detail in the Bill. It is an inevitable consequence of the Neill scheme. I remind the House of what the Neill committee said in response to our initial White Paper. It said:
	"We congratulate you, Home Secretary, on its clarity and conciseness. We appreciate the effort required to translate recommendations into legislative form and are impressed by your success in doing so".
	That is a tribute to our efforts to reflect the majority of the 100 recommendations set out by the committee.
	The noble Lord, Lord Mackay, raised a number of other important questions and political points. He asked how we can expect political parties, and third parties, to comply with controls on expenditure in the 12 months' run-up to an election, the date of which cannot possibly be known in advance. It was claimed that this was in some sense skewing the way in which politics would go. We believe that the provision ought to be on the face of the Bill in the interests of clarity and effective enforcement. It is important that political parties should know the period during which controls on campaign expenditure are to apply. In the case of parliamentary general elections, recent experience suggests that the main political parties begin campaigning in earnest about a year in advance of the expected date of the election. In spite of the fact that the precise state of a general election is not known well in advance, there is no hindrance to the operation of the scheme set out in the Bill. In practice, a political party can ensure that its campaign expenditure remains within the prescribed limits by adhering to those limits during any 365-day period. Parties will, in any event--

Lord Mackay of Ardbrecknish: My Lords, will the noble Lord give way? If that is the case, why do the Government not come clean and write into the Bill a provision to control the expenditure of political parties every month of every year? If they are always having to look over their shoulder, as it were, in an attempt to work out their expenditure in relation to a date in the future, surely it would be far better just to impose that limit on them. Secondly, will the limits apply to the expenditure of constituency parties as well?

Lord Bassam of Brighton: My Lords, I shall reflect on the second point. On the noble Lord's first point, it is inevitable in a scheme of regulation such as is envisaged and described in the Bill that there will be increased regulation of the day-to-day expenditure of political parties. It is an implication that follows as a consequence--

The Earl of Onslow: My Lords, this point is important. Let us assume, for the sake of argument, perfectly reasonably, that the Government say, "We are doing so well, we want another big bite of the cherry. We love being in government and bossing people about, and we therefore want to go to the country in October of this year", which is well within the year in which the expenditure of political parties should be controlled. How on earth is anyone to know whether the Government are likely to call a snap election, say, three and a half years into a Parliament? It is a perfectly legal thing to do, and it has been done many times. It presents terrible complications.

Lord Bassam of Brighton: My Lords, I thank the noble Earl for his point. Clearly, it is a matter that political parties will have to consider seriously in planning their expenditure over the years which--

The Earl of Onslow: They cannot.

Lord Bassam of Brighton: With respect, it is a matter to which political parties will have to give more thought. That will apply to all of us.
	Parties will, in any event, want to keep in reserve a significant proportion of their expenditure allowance for the formal campaign period during and following the announcement of the date of the poll.
	The noble Lord, Lord Mackay, made the point: why not apply expenditure controls just over the period when the election is called? The Neill committee's objective was to reduce significantly the level of campaign expenditure that was evident at the last election. It seemed to me that there was a consensus on the issue. The figures quoted were £28 million for the Conservative Party, £26 million for Labour, and £3 million for our colleagues in the Liberal Democrat Party. The figures were for expenditure over a 12 to 16-month period. If we want to end the arms race in election spending we must control expenditure over a period of about 12 months. To control spending only during the four or five weeks before the date of the poll would leave the parties free to spend millions in the run-up to the final election period.
	The noble Lord, Lord Mackay of Ardbrecknish, quite rightly, questioned the effect of the Bill on foreign funding because EU and Commonwealth nationals are permissible donors. In the Bill we have linked the definition of a permissible donor to those cases in which individuals are entitled to vote. We believe that this is a simple test which will be relatively easy for parties to follow. Our electoral law allows for Commonwealth citizens to register and vote in all elections and for EU citizens to vote in local and European parliamentary elections, as we have debated in the past. If a person is entitled to vote it must be right that he or she is also allowed to donate to a political party.
	The noble Lord also raised the question of third party expenditure in elections. The provisions in Part VI of the Bill reflect the recommendations of the Neill committee in this respect. The committee proposed that third parties should be allowed to spend up to 5 per cent of the limit for political parties, and the Bill makes clear provision for that. We cannot prevent third parties spending money in an election campaign or impose unrealistic limits. We are already aware, from the judgment in Bowman, of the view that the European Court of Human Rights would take of such restrictions. While we must allow third parties to have their say, nevertheless we recognise that the political parties are the main players.
	The noble Lords, Lord Mackay of Ardbrecknish and Lord Marsh, referred to the position of third parties in referendums. The spending controls in Part VII will apply to all organisations, not just political parties, that campaign in a referendum. The Bill provides that an organisation registered with the electoral commission may spend up to £500,000 in a UK-wide referendum. That trade unions and others should be allowed to campaign is simply a matter of free speech, which many Members of your Lordships' House have defended over the years. To prevent them spending money in a campaign would be contrary to Article 10 of the ECHR in the same way as the £5 limit on third parties under the 1983 Act has been held by the European Court to be contrary to convention rights.
	The noble Lord, Lord Mackay of Ardbrecknish, referred to shareholder approval of donations by EU companies. The provisions of Part IX reflect the relevant recommendations of the Neill committee. The requirement to obtain the prior consent of shareholders for political donations will, and can, apply only to companies incorporated in Great Britain and registered under the Companies Act. The fact is that we cannot legislate here in respect of companies incorporated in another member state of the European Union. I am afraid that, imperfect as it is, this is a situation with which we must live.
	The noble Lord, Lord McNally, dealt with an issue which I always expect noble Lords on the Liberal Democrat Benches to raise: state funding of political parties in this country. That issue is related to the question of tax relief, which was also raised in the debate. We believe that that is a form of state aid by the back door. Although we are always open to argument, it is our consistent view that it is wrong to use that form of subsidy for major political parties, particularly when there are many other calls for the funding of important public services. That is a well-rehearsed and understood argument.
	My noble friend Lady Gould asked a number of important questions, not least whether it was realistic to expect central party organisations to supervise and account for the expenditure of each and every constituent branch or association. That matter was also touched upon by the noble Viscount, Lord Astor. That must be done if the controls set out in Part V are to apply to all campaign expenditure incurred by a political party. Expenditure incurred on behalf of individual candidates will continue to be regulated by the 1983 Act, and the party centrally will need to concern itself with that issue. My noble friend Lady Gould also asked about the list of items to be counted against expenditure limits. The Neill committee suggested that any list of items to be set against expenditure limits needed to be comprehensive. For that reason the list has been placed on the face of the legislation.
	The Bill also provides for the electoral commission to produce a code of practice to give guidance as to what kinds of expenses are to be covered by the list and the allocation of overall costs. If we adopted a less comprehensive approach by setting aside the costs of staff and premises a reassessment in general terms of the appropriate limits of expenditure might be required.
	A number of noble Lords focused on trade unions. In particular, my noble friend Lady Gould asked about their role and status. It is our understanding that they are incorporated associations and, therefore, are capable of becoming recognised third parties under the terms of Part VI of the Bill. However, I undertake to investigate the matter further since it has importance and will no doubt be reflected in our further deliberations.

Lord Mackay of Ardbrecknish: My Lords, having listened to the noble Lord, he may ponder the fact that there are various professional groups within political parties. For example, if the Society of Conservative Lawyers decides to register as a third party, can it spend up to the half a million pound limit?

Lord Bassam of Brighton: My Lords, I shall ponder that point with my usual eye to detail and return to it when I have the opportunity. No doubt I shall not be allowed to forget it.
	The noble Lord, Lord Neill, was, quite understandably, concerned, as was the noble Lord, Lord Norton of Louth, about overloading the work of the electoral commission. We agree that the first priority for that commission is to put in place the controls over parties' income and expenditure. Other functions of the electoral commission will not be brought into force until some time after that body has been established. We are rather more optimistic than the noble Lord about the ability of the electoral commission to take on its broader non-regulatory, and perhaps educational, functions.
	The noble Lord, Lord Jopling, spoke about the need for a clear statement on the face of the Bill to make the buying of air time illegal. I have a great deal of sympathy with that point. However, the ban is set out in a longstanding code of practice which covers the Independent Television Commission and the Radio Authority. There is absolutely no doubt about the operation of that code, and we are not immediately persuaded that the prohibition on political advertising needs to be given any further statutory force. That is something which the electoral commission will regard as an important part of its regulatory function, and no doubt it is an issue to which we can return. We are at one on that point, which was well made by a number of noble Lords.

Lord Jopling: My Lords, although it may be made clear in one place, what harm would it do to say it again clearly a second time in this Bill?

Lord Bassam of Brighton: My Lords, when we return to debate the matter at a later stage perhaps that is something to which we can give further thought.
	I should like to focus on one or two points raised by the noble Lord, Lord Norton. The noble Lord asked whether consideration should be given to giving the electoral commission the job of setting referendum questions. We believe that separate legislation is required in order for any particular referendum to be held, and the questions to be asked will need to be considered in that context. It is right that the wording should be a matter for Parliament to decide. Surely, that is part of our primary purpose. It has been suggested, however, that the electoral commission should have an advisory role in setting the wording of a referendum question. That may well be an appropriate role for it to undertake. It is a suggestion to which the Government are prepared to give further consideration, although the Neill committee did not envisage that as one of the roles of the commission.
	I was interested in the point raised by the noble Viscount, Lord Astor, about the commission's neutrality and independence. In another place Members of the noble Lord's party moved amendments which explicitly sought to have on the face of the Bill that no serving or former Member of the House of Commons, the Scottish Parliament, the National Assembly for Wales, the Northern Ireland Assembly or the European Parliament shall be eligible for appointment as an electoral commissioner. Do I now understand that the noble Viscount argues against that point?

Viscount Astor: My Lords, has the Minister not heard of probing amendments? They are tabled in this House and another place.
	Before the Minister leaves the issue of the commission, why does it need to promote public awareness of the institutions of the European Union?

Lord Bassam of Brighton: My Lords, I shall turn to that point, but I had hoped for some consistency across both Houses on the need for the independence of the electoral commission. When we return to the point at a later stage, I hope that that wish will be fulfilled.
	It is clearly important that the commission has the broader, educational role of explaining and underpinning governments' civic responsibility in promoting greater awareness of all our important political institutions. Some Members of your Lordships' House--the noble Lord, Lord Lamont, made this point--took a rather sinister view of the role. I have a more generous view. There is an important educative role for the commission to fulfil. However, we shall undoubtedly return to that issue.
	I said that I would pick up the point raised by the noble Earl, Lord Onslow, about funding of parties from the US. An order made under Clause 65 will disapply the provisions of Part IV of the Bill in respect of Northern Ireland parties. Such an order will apply for four years in the first instance. The effect of such an order will be that parties operating in Northern Ireland will, as now, be able to accept donations from the Irish Republic and elsewhere, including the United States. The Neill committee recognised that as an inescapable consequence of its proposals. We agree that it would be preferable not to make any distinct provision for Northern Ireland parties.

The Earl of Onslow: My Lords, this seems so fundamentally true. Why is it morally wrong for a Chinese supporter of the Conservative Party to send a cheque to the Conservatives, or a Clinton supporter of the Labour Party to give the Labour Party a cheque, but not for Noraid to send a cheque to Sinn Fein? I cannot see the moral difference, except political cowardice. That is the only reason for it.

Lord Bassam of Brighton: My Lords, the noble Earl is entitled to his opinion. We have set out our stall on the issue of transparency. We believe that to be right. But we have to be realistic about what can be achieved. It was in that spirit that the Neill committee recommended that in the light of the Good Friday agreement it would be wrong to place barriers in the way of parties operating on an all-Ireland basis. That was essentially the range of its argument.

Lord Mackay of Ardbrecknish: My Lords, before the Minister leaves that point, I am trying to follow his argument. The noble Lord cannot pray the Neill committee in aid when it comes to taking money from the United States. Recommendation 29 states:
	"In relation to donations to political parties in Northern Ireland, the definition of a 'permissible source' should also include a citizen of the Republic of Ireland resident in the Republic subject to compliance with the Republic's Electoral Act 1997".
	I do not know what the Electoral Act does, but if it does not include American citizens I do not understand how the Government can pray in aid the Neil committee.

Lord Bassam of Brighton: My Lords, the noble Lord makes an important point on which we shall undoubtedly have some vigorous discussion. I do not have the report before me. However, I shall study carefully those points when I read Hansard.
	The hour is getting late. The noble Lord, Lord Rennard, raised the issue of expenditure limits. The limits of £100,000 for by-elections and £20 million for national expenditure by parties were clearly recommendations of the Neill committee. We feel bound by those. We believe that they are right and proportionate.
	In conclusion, political parties have a vital role to play in our representative democracy. Parties provide the link between the citizen and the government of the day. It is the political parties which formulate and articulate the clear choice between competing values and their practical manifestation in a coherent set of policies as set out in a manifesto. By presenting these competing choices at elections, political parties offer the people that fundamental right in a democratic society to determine for themselves how they are governed.
	These are onerous responsibilities. People place their trust in politicians and political parties and it is incumbent on them not to abuse that trust. The secretive funding of political parties, including by foreign donors with no direct stake in how we run our national affairs, has served, we believe, to undermine that trust and weaken the compact between the citizen and the state. It is vital to the health of our democracy that the funding of political parties is open and transparent.

Lord Norton of Louth: My Lords, perhaps I may raise a small point. As did the noble Lord, Lord Rennard, the Minister refers to an open and transparent system. I am still unclear as to the difference between openness and transparency.

Lord Bassam of Brighton: My Lords, I enjoyed the observation. The noble Lord is being precise; and that is fine. But I believe that openness and transparency go to the heart of the issue. I am sure that noble Lords opposite understand and appreciate that.
	The Bill will ensure that openness and transparency and it will strengthen the accountability of parties not just to their members but to the wider electorate. I should have thought that that is the biggest benefit of this legislation. In short, the Bill will strengthen the very fabric of our democracy. For too long the closed door approach has obstructed that process. For that reason, I commend the Bill to the House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

CJD

Lord Lucas: rose to ask Her Majesty's Government what preventive measures they are taking and what preparations they are making to deal with the possibility of a sizeable epidemic of new-variant CJD.
	My Lords, I seek to persuade the Government to prepare for the worst. I can do no better than refer the Minister to the paper published by Professor Collinge in July 1999 setting out his views on the likely course of new-variant CJD in Britain. The conclusions he reached were that in all likelihood what we are seeing at present are not individuals who caught the disease at the time we knew that BSE existed but those who had caught the disease before that; and, taking a line from other TSEs in humans, we were likely to see the peak of this epidemic in 15 or 20 years' time. Therefore, considering the level of cases occurring now, we may be looking at a disease which will kill hundreds of thousands or even millions of us.
	Should we ever reach that horrific moment when we have to admit that an epidemic will kill enormous numbers, I want the Government to be able to look back at what they did with pride and to say, "We did the best we could. We took all the measures we reasonably could take at the time". I want the rest of us to be able to agree with the Government on that.
	I was a fly on the wall, as a very junior member of the Government in the Ministry of Agriculture, Fisheries and Food, when the BSE crisis boiled over. I look back at that period as a time of panic and a lack of preparedness. I look back at 1,001 things that we could have done better in the years running up to that point. But I also look back at a government composed of people who had the best of motives, took the best of advice, and did what they thought was best at the time.
	There are two main reasons why the road to hell was paved with our good intentions. First, we were optimistic. Of course we were. Before knowing to the contrary, who would not wish that BSE could not transmit to humans? However, we allowed that optimism to cloud the need for pessimism. We concentrated on giving the public a reassuring message and we believed that doing so precluded us from taking precautions, openly and in public, to deal with the situation should our optimism turn out to be unjustified.
	The second reason for getting things wrong was that we were secretive. There is, and always has been, a strong culture of secrecy in MAFF, but we allowed it to take over. All the research data, conclusions and direction were confined within MAFF. There was little public knowledge outside of what was happening. All the decisions were taken internally. Such a closed attitude leads to bad, slow, misdirected research.
	The other aspect of secrecy was that we took our decisions in private. We did not publicly share them or the reasons for taking them. That meant that if later the decision turned out to be wrong or questionable, it was hard to go back on it. As it had not been accepted by the public when it was taken, to go back on it (having asked them to believe in it) risked precipitating a crisis which might not be justified. Sadly, that was not borne out by experience.
	Optimism and secrecy meant that we could not obtain proper funding from the Treasury for preventive measures and for research. The Treasury was not told the full extent of the fears about what might be going wrong. We could not prepare our European and other colleagues for the worst and we could not prepare our citizens for what might happen. Therefore, when the crisis broke, it was devastating.
	The reason I have asked for tonight's debate is that when I look at what the Government are doing about new-variant CJD I recognise the same symptoms in what we did during the run-up to the BSE crisis. I see the same optimism and secrecy.
	If we were making preparations for the worst, we would expect to see a large, open, public research programme. We would expect to see scientists all over the world swapping information openly and freely. In the best and most open scientific areas there is real work to be done at the fundamentals of science. That is certainly true in respect of new-variant CJD when we do not even know the basic disease mechanism.
	The best examples publish their laboratory workbooks daily on the Internet. We have to wait a year, or a year and a half, for results on new-variant CJD to be published in a review paper. Asking the Government for information can be like drawing teeth. I asked the Minister a Question about the ages of people who have died of new-variant CJD and was told to the nearest 10 years. How can one use such data to draw a graph and see what is happening, given the number of people who have died of the disease? Even the basic, most simple, least important data is being held back and delayed by the Government. That is entirely familiar to me as we did exactly the same thing.
	We ought to be looking at a research programme which will clearly and to everyone's knowledge provide a good picture of what is happening. The foundation of that must be prospective studies. It must be gathering data on a large group of us, testing us, seeing what is happening to us and then waiting to see how many of us die of the disease. Unless that is done, we shall lack the basic predictive data which enables us to work on the disease if and when it becomes relevant.
	There is only one sizeable prospective study. It is a tonsil test covering 1,000 people, but it has been delayed for more than a year by a hospital ethics committee. The sense of urgency does not exist. I ask the Minister what progress has been made in evaluating the capillary electrophoresis test developed by Mary Jo Schmerr. He may remember that the Answer he gave was that the test had undergone some preliminary evaluation and that an application for full evaluation is being considered.
	However, The Times of 3rd October--six months ago--reported a MAFF spokesman as saying that a team had been set up to evaluate the test and then begin a screening programme. In six months we have gone backwards. We are not looking at a government with a sense of commitment or urgency to analyse what is going on with the disease.
	If we arrive at a point of crisis, we must have diagnostics, cures and prospective studies well under way and co-ordinated; and we, the public, must know what is going on. If not, we shall risk a catastrophe of confidence in the institutions of this country and in our future as individuals.
	Another symptom of optimism and secrecy is things left undone. The noble Lord will have seen the article in the Sunday Times picking up the fact that we in this country are still feeding calves with blood, gelatin and tallow. We now know--we might not have known at the time the regulations were promulgated by the EU--that all those substances carry infection when the original animal is carrying BSE. How can we be feeding such substances to calves, which is the most vulnerable stage of a cow's life? How can we continue to do so when we have taken expensive precautions to try to reduce the risk of humans transmitting new-variant CJD in their blood, a course which has not been proven? We have ignored the certainty and alighted on the great uncertainty.
	When dealing with BSE and new-variant CJD, we have always had a problem as regards the lack of co-ordination between MAFF and the Department of Health. Having responsibility for the one disease sited in two ministries was always a questionable decision, but this Government have gone further and sited it in three departments. The Food Standards Agency is to have its own axe to grind on the subject. The possibilities of co-ordination have been immensely reduced.
	One of the basic things we need to know about TSEs is the strain of disease we are facing. The strain of TSE makes an enormous difference to the symptoms and to the progress of the disease. Presuming that the disease has come from cattle, which is almost certain, we need data about the strains of BSE in cattle. We have always been told that there is only one, but that assertion has been based on strain-typing nine cows--nine out of the hundreds of thousands which have died of the disease. There could be a significant level of infection from a different strain attacking the human population. We would not know about it because we have not done the basic research into the strains which exist in cattle.
	One of the key actions to take at this stage in the BSE epidemic is to examine what is happening to the tail in order to make sure that there are no transmission mechanisms in cattle that we should be dealing with, thereby ensuring that the original source is gone for ever. But MAFF will no longer make predictions for the BSE epidemic beyond 2001; it is not even looking at the question of what will happen beyond that. When the Sunday Times asked it about those cattle born in 1996 which had contracted the disease--that is supposed to be at the end of the epidemic--MAFF refused to say in which month those cattle had been born.
	That is symptomatic of a determination not to pick up the details in the hope and pervading optimism that we shall not need to know them because everything will turn out all right. We are not properly testing cattle at slaughter to discover whether they are carrying BSE. We are not running trials in sheep to discover whether they can catch BSE, what the symptoms are, and how we can pick them up in the national herd.
	We are not looking at the brains of other species of food animals to see whether they, too, have TSEs or have been exposed to TSEs or whether, through our practice of feeding cows to them, they have picked up BSE in their turn. All those little things are being left undone because there is no stream of pessimism in the Government's thinking, any more than there was in ours.
	Another symptom is evasive answers. I asked about blood donations. The noble Lord replied that there is strong epidemiological evidence that classic CJD is not transmitted through blood. That is not true. There is no evidence one way or the other, but there is certainly no evidence that it is transmitted through blood. However, even a combination of all available studies is not statistically significant. In many of them there are severe problems with the selection of controls, and some studies show that receiving blood from a person who has CJD protects that person against CJD. The selection of controls has been bad enough to allow that result through. The answer given by the noble Lord--in the best of faith, I am sure--does not accord with the evidence. It is a distortion of the evidence. We got away from that for a year or two after the break of the BSE crisis when there was a pathological attachment to openness and honesty. That seems to have gone, but it needs to be recreated.
	Again, I asked about transmission from mother to child in utero of new-variant CJD in humans. The noble Lord replied that no confirmed or probable case had been reported. I read the newspapers. I know about this child, who appeared to have neurological symptoms after his mother had been diagnosed with new-variant CJD. I know that their symptoms are different from classic new-variant CJD. However, perhaps the noble Lord can tell me--I am sure that the Box could tell him--whether that child is met/met at codon 129 or whether that child is met/val? If that child is met/val, one would expect different symptoms and a different disease. Those data, which I am sure the Government have, have not been released.
	What do I want the Government to do? I want the Government to be open. I want to make sure that all the Government's data are available to all and any researchers. I want people who research with government money to be open on a daily basis about what they are doing. I want the Government to take their decisions in public so that their errors may be exposed quickly and so that what, at the time, are reasonable decisions gain public support at the time so that they are not blamed if those decisions turn out to have been wrong. I want the Government to prepare for the worst. I want them to think through what it would be like if we had a major epidemic of new-variant CJD in this country.
	Then I want the Government to talk that through with the Treasury so that proper funding is in place for preventive measures; with the European Union so that we do not have the "kick Britain" attitude that we had at the time that the BSE crisis broke; with the United States, whose attitude to trade and passage of peoples between the UK and America will be enormously important; and with life insurers, who will have a great deal to say if people start dying in large numbers from this disease.
	I want the Government to be able to look back and say that everything that they have done is all that it should have been. I believe that if they follow the route of openness and preparedness, they will be able to do that and that we shall have a research programme that we all believe to be right and adequate and of which we can be proud. I believe that we would then have good decisions in place of the frightened and bad decisions that we seem to get at the moment. Above all, I believe that if the crisis breaks with this Government in charge, rightly or wrongly they will be able to blame us for BSE and get away with it. If this Government, with our example in front of them and in the clear knowledge of all that we did wrong, make the same mistakes, we shall suffer enormously as a country and this Government will be damned and doubly damned in the eyes of their people for ever.

Lord Clement-Jones: My Lords, I begin by congratulating the noble Lord, Lord Lucas, on securing this debate tonight. I pay tribute to him in his tenacious pursuit of the truth and proper action regarding new-variant CJD. He has raised a number of very important questions. Clearly, the noble Lord, Lord Lucas, has engraved on his heart the experience of the former government. However, I do not intend to go over some of that rather well-trodden ground and I do not believe that I wish to anticipate the results of the BSE inquiry, which we all await eagerly. I am sure that we shall debate it in this House in due course, and that will no doubt take us back to 1986 and probably beyond.
	I believe that the real story started in 1996 when new-variant CJD was first recognised and described, whatever the rights and wrongs of the background to it. We now see that new-variant CJD is a disease that has terrible consequences. Slowly and surely, it destroys a patient's mental and physical control and leads to an early death. The recent Sunday Times article on 5th March, which I believe the noble Lord, Lord Lucas, referred to in his speech, described harrowingly how Janet and her child, Amanda, also with new-variant CJD, were slowly dying before the eyes of Sarah, who was both mother and grandmother in those circumstances. I must admit that that article made a considerable impact on me and I have no doubt that it did on many thousands of others.
	Already, some 52 people have died from new-variant CJD. Tragically, those people were predominantly in their twenties and thirties. There is no doubt that the risks are taken seriously by this country and other countries. Indeed, the US Food and Drugs Administration has banned blood products from those who have merely visited the UK for more than six months after 1980. Certainly, that can be described as the "ultra-precautionary" approach.
	However, the debate this evening mainly provides an opportunity to question this Government's approach to prevention and treatment of new-variant CJD. On these Benches we welcome a number of the steps already taken by the Government, such as the setting up of the BSE inquiry in the first place. However, I believe that the results of the inquiry are now nine months overdue. Can the Minister indicate when it will report?
	Another matter that we welcome is the guidance issued in June 1999 on the danger of cross-infection from contact lenses. We also welcome the announcement of improvements to the care of new-variant CJD patients announced in December by the Minister of State responsible for Health, John Denham. However, will he follow up those February 1999 recommendations on the care and information needs of new-variant CJD patients? The Minister will recall that there is a strong recommendation for a key worker to be appointed at a very early stage as soon as new-variant CJD is diagnosed. I believe that those care and information recommendations should be a strong part of the new procedures that the Minister announced in December.
	We also welcome the reissuing of guidance to coroners and others regarding the treatment of those who have died from new-variant CJD in the face of evidence of distress caused to families by inappropriate restrictions placed on funeral arrangements. That was a matter raised recently in the other place by my honourable friend Nick Harvey. We also welcome the agreement of the CMOs reached last December to monitor closely the incidence of new-variant CJD, as we do the new system of reporting by SEAC announced this March which will track the incidence of possible new-variant CJD among living patients, not only the deaths arising from CJD. I welcome the fact that the research appears to show that the tracking system is watertight.
	Finally, we welcome the setting up of the Food Standards Agency today. I take the opportunity to welcome Sir John Krebs and his colleagues to their important task. I believe that they will play a very important role in relation to the food safety aspects of BSE/CJD.
	However, there is still much uncertainty surrounding new-variant CJD. We are still at the foothills of knowledge in relation to CJD. I very much support the call by the noble Lord, Lord Lucas, for the maximum amount of openness in this respect. New research will no doubt end some of it, but there are still major questions to be asked of the Government.
	What are the Government's most recent thoughts on the nature of the CJD infection? Does Professor Donaldson still stick by his view expressed last July and published last September that millions could still be at risk? Can we read anything into the fact that deaths from CJD went down from 17 in 1998 to 11 in 1999? Have we actually reached the peak? What is the best estimate from the Government and their advisors of the incubation period? Are the Government now convinced that the key cause of new-variant CJD was exposure to BSE? Do they consider that the research by the University of California and the Edinburgh Western General Hospital is conclusive on this matter? Is there a risk of vaccines causing new-variant CJD? That is tipped as something which the BSE inquiry may wish to discuss.
	Furthermore, what about blood products, mentioned by the noble Lord, Lord Lucas? Not just blood products of animals but the general ban on the use of UK plasma in 1997 for haemophiliacs was welcomed. But what of fresh frozen plasma which is used? What other risks are there in relation to other blood products? Is the process of leucodepletion safe?
	We need to answer all those questions. The noble Lord, Lord Lucas, raised a further question which needs to be answered. Is it now accepted that new-variant CJD can be transmitted from mother to child? If so, what preventive steps can be taken? I mentioned the case written up in the Sunday Times of 5th March. That did seem to indicate transmission of new-variant CJD from mother to child. It certainly behoves the Government to be taking active steps to ensure that prevention is strongly on the agenda.
	What tests are available for use in the NHS? The noble Lord, Lord Lucas, also asked what tests are available to detect CJD. Is the tonsil test generally available in the NHS? Is there urgent evaluation of any other tests? How is the research which is being carried on by Imperial College and St Mary's Hospital proceeding on the matter of testing? How watertight is the current system of tracking cattle and their offspring? Is it really correct that some 90,000 cattle have simply "gone missing"? Are reports elicited by the noble Lord, Lord Lucas, that cattle are still being fed cattle products made of tallow, blood and gelatine actually correct? Does the Minister agree with Professor Collinge, who wrote in The Lancet last July:
	"that the risks of blood and blood products cannot be quantified".
	If so, how can the Government claim that they are taking a precautionary approach? What guarantee do we have that the events of the past few years will not happen again?
	There are many unknown aspects of BSE and CJD and there have been for many years. The public need to have a considerable degree of trust in politicians and scientists that the right course of action is actually being taken. To date, to be quite frank, that trust has not always been justified. I look forward to hearing what the Minister has to say.

Earl Howe: My Lords, the whole House should be indebted to my noble friend Lord Lucas for having secured a debate today on the subject which he has made it his business to research in depth. It is a deeply troubling subject, and if there is a single message that my noble friend would wish distilled from his admirable opening speech, it is--at the risk of misrepresenting him--that if ever there was an issue on which there is absolutely no room for complacency whatever, this is it. I hope and believe that the Minister's speech will reassure us that no such complacency exists, politically, scientifically or medically. But the issue of new-variant CJD does not stand still. As my noble friend has emphasised, we must constantly examine all new data and constantly look ahead.
	The Question on the Order Paper urges us to look ahead to the possibility of a major epidemic of new-variant CJD at some point in the future. Our difficulty is getting our bearings on the likely scale of such an epidemic or indeed on whether any sort of epidemic will occur at all. At this stage we simply do not know what will happen. It is not even possible to make an educated guess, despite the theory of a causal link between BSE and CJD being now a virtual certainty. Shortly after the last election I attended a presentation given by senior statisticians from City University. Their research indicated that the total number of variant CJD cases was likely to be fewer than 100. That conclusion was based on an analysis of new-variant CJD cases to date and on a number of assumptions, the most significant being that the incubation period for new-variant CJD was relatively short.
	However, that conclusion is by no means universally accepted. It is clear from published data that we cannot be at all certain that the incubation period for the disease is a short one. On an analogy with kuru, it may extend over a period of 20 or 30 years. While we can estimate the number of BSE-infected cattle that may have entered the human food chain in the early to mid-1980s, we do not know how much infected meat was consumed, nor the extent to which the species barrier between cattle and people has inhibited such infection. Similarly, there is some evidence that genetic susceptibility plays a part in the onset of CJD, but that does not mean that people with a different genetic make-up may not be infected with the disease and incubate it for longer. The fact that there have to date been only 52 deaths positively attributable to new-variant CJD is no indication at all that the optimists are right and the pessimists wrong. The Chief Medical Officer has warned that we could still be facing a large number of cases over several decades.
	Therefore, predicting the course of the disease must be a priority. Currently there are programmes in train to devise a non-invasive test for BSE infection in live cattle and for pre-clinical new-variant CJD in the human population. I hope that the Minister can tell us something about these. We can also look forward to the results of biopsies of tonsils and appendices. Some 18,000 such samples taken from patients in the south west of England and the Lothian regions are being examined for the presence of abnormal prion protein. I was pleased to see a few days ago that ethical approval had been given to begin a further study of 2,000 tonsils. Will the Minister tell us about the timescale of this work and when the results are likely to be published?
	Meanwhile, the paramount duty of government is to protect human health from the risk of infection. There are perhaps two principal spheres of action. The first is to ensure that food is safe. The measures that are in place relating to cattle are well known: the ban on animal protein in ruminant feed; the rule that cattle over 30 months cannot enter the human food chain; the cull of offspring of BSE-affected cows; the removal of specified risk material from all cattle at slaughter. Those measures are only as good as the rigour with which they are enforced.
	I understand that the Meat Hygiene Service is confident that procedures at slaughter to ensure that banned meat and offal does not slip through the net are being observed conscientiously. However, will the Minister confirm that the checks on cattle at slaughter still include an inspection of teeth? Irrespective of the ear-tag and the date on the cattle passport, there is a need for a belt-and-braces approach to prevent over-age animals from entering the food chain. What level of error or deliberate non-compliance on the part of farmers has been uncovered by the Meat Hygiene Service in recent months? What procedures are in force to check the safety of imported meat?
	However, there are some worrying areas of uncertainty. It is still possible that BSE may have been transmitted to other agricultural species; notably, sheep. The symptoms of scrapie and BSE are indistinguishable. If BSE were to be found in the sheep population, the consequences would be extremely serious, not least because, unlike its occurrence in cattle, BSE infects almost the whole animal and not just certain organs. Is the Minister in a position to say whether large-scale tests are now under way; whether there are any plans to tag sheep; and whether, if BSE were to be found in sheep, consideration would be given to a cull? If he cannot comment in any detail now, will the Minister undertake to keep the House closely informed of developments under that heading?
	I mentioned action in two spheres. The second sphere is to eliminate, as far as possible, the risk of transmitting new-variant CJD from person to person by medical means. Much has been done to forestall what is still only a hypothetical possibility. Procedures are in place to remove white cells from blood intended for transfusions and to source blood plasma from abroad. There are strict rules to prevent blood entering the blood supply from donors who themselves received blood from people who later developed new-variant CJD.
	On a less theoretical level, there are strict precautions for the sterilisation or disposal of surgical instruments and for dealing with waste, spillages and accidents involving potentially infectious material in hospitals and other clinical settings.
	None of those precautions is failsafe but they are important safeguards nevertheless. Can the Minister say whether the guidance on safe working practices published in April 1998 is due to be updated and if so, when?
	My noble friend laid great stress on the need for openness by government. I endorse that view without hesitation. His opinion of the culture within MAFF as one which inhibits such openness is perhaps, with all deference to him, somewhat jaundiced. I should not go that far. I believe that in MAFF there exists a desire to ensure that whatever information reaches the public domain is both robust and fully considered. MAFF has had a lot of experience of trying to rebut inaccurate scare stories and it has not always been successful in that. While it may not have appeared that way to some, I can say from my own experience that Ministers in the last government were insistent on the need for full disclosure of all findings on BSE as they emerged, whether good or bad news. Despite the worrying examples of evasiveness quoted by my noble friend, I hope that the present Government work to the same principle.
	On a small but significant level, it is reassuring to see that the monthly statistics published by the Department of Health now include probable as well as confirmed CJD cases.
	The real difficulty about disclosure is one which my noble friend tended to gloss over somewhat. It is extremely difficult to give the public a balanced picture of what the risk is when it is innately suspicious of government and fearful of what they think may happen. Presentation of statistics is the easy bit. But what we have not always got right is the language which accompanies such statistics to ensure that people have a proper understanding of what the figures are saying. Scientists are not necessarily the best people to articulate such language, even if the public tends to trust them more than it does politicians.
	If I have a criticism of the last government, it is that they were not as aware as they should have been that their attempts to communicate the extent of the risk to human health posed by BSE were largely unsuccessful. The announcement in March 1996 that there was a prima facie link between BSE and new-variant CJD should not have come as such a shock when, for the previous 10 years, the precautionary measures put in place by government had been designed to anticipate that very finding.
	That argues for the more effective dissemination of the results of government research, as my noble friend emphasised. I hope that the Minister will be able to tell us how that task is being tackled.
	It is perhaps a tall order to ask government to prepare in detail for a set of events whose likelihood no one can predict. But my noble friend has made some very powerful points. One of the things that Ministers can do is to reassure us that should a sizeable epidemic of new variant CJD occur, resources will be found in both money and people for the proper care of patients.
	A paper by Dr Margaret Douglas and others published just over a year ago makes salutary reading. They found that the needs of CJD patients and their carers are usually not clearly defined; that there was poor co-ordination between professionals and a lack of essential information for families. One recommendation was that every patient with suspected CJD should have a key worker allocated to co-ordinate his or her care and especially to reassess the patient's needs as his condition develops, as it often does so extremely rapidly. It was suggested that the key worker should be a professional, such as a nurse or social worker with a good knowledge of local health and social services. I ask the Government whether those conclusions have been taken on board and whether they share my view that the availability of good palliative and hospice care for such patients should not be overlooked.
	I do not doubt that much more could be said on this important topic. It is one to which we should return at appropriate intervals. For now, I hope that the Minister can provide us with a clear exposition of government policy.

Lord Hunt of Kings Heath: My Lords, I thank the noble Lord, Lord Lucas, for having raised the issue of new variant CJD. He has spoken in a sense from experience, as well as from a great deal of knowledge. The friendly warning which he has given to the Government in relation to the dangers of complacency, optimism and secrecy is one which I well take. I hope that I shall be able to indicate to noble Lords that the Government take those matters with a great deal of seriousness. We are ever mindful of the need for rigour in terms of monitoring what is happening and planning for the future.
	The noble Earl, Lord Howe, put his finger on the matter; that, in discussing these issues, we must bear in mind public confidence in all that we do, enabling us to give the public a balanced picture of risk in these important areas. I certainly hope that the approach we are taking and the openness that we are adopting to public debate in those areas, alongside the introduction just three days ago of the Food Standards Agency will enable an informed public debate about many of those difficult issues. None of us can be complacent in assuming that it is easy to enable an informed public debate on areas about which there is both understandable concern and, in some cases, susceptibility to rumours and to allegations which are often not proven but which nevertheless give rise to a great deal of public concern. That serves only to indicate the difficult balance in deciding on a sensible way of approaching the issues.
	The noble Lord, Lord Clement-Jones, reminded us that it was in March 1996--only four years ago--that the first cases were confirmed. Since then, we understand that 53 people are known to have died of the disease. We are aware of a further 12 people still alive who are probably suffering from the disease. There are also two other probable cases where the sufferers have since died but pathological confirmation is still awaited. That adds up to a total of 67 known cases to date. But statistics alone can in no way describe a disease which is always fatal and which has caused and causes untold suffering both for the patients and for their families.
	One of the particularly distressing features of variant CJD is the number of young people who have suffered terribly. Since May 1997 the British Paediatric Surveillance Unit of the Royal College of Paediatrics and Child Health has been working with the CJD Surveillance Unit and Addenbrookes Hospital, Cambridge to try to identify any possible variant CJD cases at the first possible moment. Each month, a survey is carried out of all 2,000 consultant paediatricians, to ask if they have come across any cases of progressive intellectual or neurological deterioration in under 16 year-olds. There is currently a 90 per cent response rate, including some nil returns.
	Of the 602 cases investigated to date, only three definite or probable cases of variant CJD have been found. Results are published in the annual report of the British Paediatric Surveillance Unit. I should not pretend from that that we know the whole story. In helping to address our knowledge gap, I pay particular tribute to the work carried out by the government-funded National CJD Surveillance Unit in Edinburgh--the scientists who first discovered variant CJD. We work closely with them as they undertake their work of monitoring the incidence of the disease and looking for any trends which may be emerging.
	The unit maintains close links with neurologists across the UK in their tracking of cases and reports findings regularly to the Government. In 1998, 17 confirmed deaths were reported from the disease. My understanding is that 1999 is likely to show a drop, with only 12 cases having been confirmed so far, although there may be one or two more in the pipeline. We can only cautiously welcome the news about last year's decline. However, in using the word "cautious", I take the point made by the noble Lord, Lord Lucas, because the disease can have a long incubation period of 20 years or even more, so we certainly cannot relax. The statistical modellers tell us that it may be at least a year or two yet before we shall be able to rule out significant numbers of people eventually succumbing to the disease.
	There is the related question of diagnostic tests. There has been recent scientific progress in this area, in particular with the use of magnetic resonance imaging of the brain, and with tonsil biopsy performed at St Mary's, London. Those developments have enabled clinicians to be able to examine those clinically ill but still alive and provide a "probable" diagnosis of variant CJD. The CJD Surveillance Unit is then able to pass on statistics of such cases to the Government to enable figures to be published. We did that for the first time on 16th March, and we shall incorporate such information within our regular monthly press statements, the first of which is published today. That information provides a more current picture than hitherto, and helps us to get a better handle on what is happening with this disease.
	I was asked about those who may be incubating the disease but have yet to show any clinical symptoms. How many are there and who are they? With variant CJD we are much hampered by the lack of a simple diagnostic test. Last September the Spongiform Encephalopathy Advisory Committee, or SEAC, identified the development of such a test as a priority. Although no imminent results are in prospect, studies are under way as part of the £26 million-worth of government-funded research to look into CJD and BSE issues during the coming year.
	Meanwhile, and in answer to the comments made by the noble Earl, Lord Howe, analyses are taking place retrospectively of some 18,000 tonsil and appendix samples taken from routine surgical operations in the South West and Scotland. In that study, scientists are looking for the presence of abnormal prion protein, as there is some evidence that that may be detectable at the pre-clinical stage, although we do not know when. Results from the first 2,000 samples will be presented to a meeting of medical and scientific experts under the auspices of the Medical Research Council and the Department of Health later this month. An announcement about the findings will be made shortly thereafter.
	Turning to the preventive measures that the Government are taking, we have to rely on the scientific advice that we are given, even when, in some instances, that has to be taken on a precautionary basis. Of course, the Government rely on SEAC in its provision of independent scientific advice. Given the theoretical possibility of some pre-clinical infection being present in the population, the possibility of person to person transmission of that infection cannot be ruled out. We have taken action on a precautionary basis to deal with that. All blood destined for transfusion from 1st November 1999 has had its white cells removed and all blood products are now sourced from non-UK plasma. SEAC has endorsed those measures. The Government have also taken steps with the optical profession to implement SEAC advice that, among other things, the single patient use of trial contact lenses should be adopted.
	In addition, SEAC has recommended rigorous implementation of washing, decontamination and general hygiene procedures to be key preventive measures when dealing with surgical instruments. Again, we have issued a comprehensive package of guidance to the healthcare sector to underscore this message. I can tell noble Lords that we regard this as forming a part of infection control procedures within hospitals which we are determined to performance manage rigorously.
	SEAC has highlighted that the theoretical risk of person-to-person transmission could be greatest from operations involving central nervous system and ophthalmic tissue, followed by lymphoid tissue. SEAC has also advised that, wherever practical, the use of disposable surgical instruments for such surgery is to be encouraged. We have met with surgeons and others to look at the practicalities of developing and implementing a single-use policy wherever this is seen as being realistic and we are taking this forward.
	The noble Lord, Lord Lucas, asked what progress had been made on evaluating the test developed by Mary Jo Schmerr of the National Animal Disease Center of the US Department of Agriculture. I regret that I am not in a position to provide any further information beyond that I gave in my Written Answer. It is clear that before such a diagnostic test is put into use, we must be sure that it provides accurate and reliable results without giving what might be described as false positives. I am not able to predict when any of the blood tests currently being developed will be completed, although I am happy to ensure that the noble Lord is provided with as much information on progress as possible.
	The noble Lord asked about information relating to the ages of new-variant CJD cases. I have to tell the noble Lord that one of the issues in relation to this information is that because of clinical confidentiality such information cannot be released in a form which could be linked to particular individuals. Furthermore, in response to the noble Lord's comments on the secrecy surrounding research in this area, I have to tell the noble Lord that, while I fully accept the need for openness, it is important to note that all TSE research projects currently completed and funded by public moneys are already listed on the MRC website. The site provides a breakdown of areas of research being covered, including those identified with the issues before us tonight, as well as issues concerning the annual costs of such research projects.
	The noble Lord also raised the question of whether research ethics committees were inhibiting the development of such research. He mentioned in particular the research proposed by Professor Collinge. In this area it is important to ensure that all ethical considerations are taken into account with the utmost care. I believe that it would be wrong to ride roughshod over the normal processes of establishing a science-based ethical opinion on how such matters should be addressed. If, for instance, inappropriate short cuts were taken, the fall-out could be considerable, in particular if--as I have already suggested--an unreliable test produced false positives and thus caused unnecessary alarm.
	However, I agree that we need constantly to review the performance of research ethics committees. Only two weeks ago I attended the annual conference of the Association of Research and Ethics Committees. The department provides some resources to support the work of those committees. I can assure the noble Lord that I shall continue to keep under review their work and progress because I accept the point about striking a balance between the need to ensure that necessary research is undertaken as quickly as possible and the need to ensure that a proper review of the ethics takes place.
	The noble Lord asked about a case reported about the possibility that TSE had been transmitted by a mother to a child in utero. I cannot report on individual cases. The case in question is a confidential matter between clinicians, patients and families. However, my understanding is that no child under the age of 13 has been reported as a probable or definite case of new-variant CJD.
	I was asked by the noble Lord, Lord Lucas, about the feeding of tallow, gelatin and blood products to calves. I understand that United Kingdom rules on feeding stuffs are much tighter than those elsewhere in the EU. We ban the feeding of mammalian meat and bonemeal to all farm animals whereas the EU rules only prevent the feeding of MBM to a selected area. Certainly in accordance with EU rules, we allow the feeding of milk, tallow, gelatin and blood products to ruminants and we believe that is in line with SEAC's advice.
	I have dealt with the issue of blood transmissions. The noble Lord asked me about genetic testing. All probable and definite cases of new-variant CJD so far have been found to have been from methionine/methionine homozygous genotype and of the same genetic sub-type as the population. However, I cannot divulge the details of individual cases.
	The noble Lord, Lord Lucas, also asked me about the testing of other animals for BSE. Of course, extensive research has been undertaken into the issue of sheep and BSE. My understanding is that BSE has not been confirmed as occurring in animals from the national flock. The possibility of BSE occurring in sheep has been recognised for some time, and for that reason precautionary controls on a number of specified risk materials from sheep carcasses have been recommended by SEAC and introduced over the past few years; SEAC keeps under review the research that could distinguish between BSE and scrapie infection in sheep. However, that work will take several years, and preliminary and interim findings will be coming along, as they do now, at intervals.
	I was asked a number of questions about the issue of service provision. We are talking about a rare disease and our hope is that it will remain a rare disease, although we cannot be complacent, as the noble Lord said. We also know that this disease can be extremely distressing. We would all feel enormous sympathy for all the people who have suffered from the disease and for the families who have been affected. It is very important that we ensure that the National Health Service in particular is able to provide appropriate care and support.
	The CJD Support Network, with government funding, provides support to families affected by CJD. The network issued guidance in 1998 to help to inform social service professionals. The need constantly to reappraise care needs in the light of families' wishes is one key message. The St. Mary's Prion Unit in London offers information, advice and support for patients, families and professionals. The Human BSE Foundation, with a grant from the Government, plays an active role in providing emotional and practical support to the families of patients. The CJD Surveillance Unit works very closely with the voluntary CJD Support Network. Earlier this year the unit appointed a care co-ordinator to provide a central source of advice for professionals and carers. This will help the unit further in carrying out its important role in providing expert advice on healthcare for all CJD victims.
	The Government will very shortly be publishing some new guidelines, which are expressly intended for those healthcare professionals who are caring for CJD victims. I can say to your Lordships that it will mention the importance of having a named key worker in place as soon as possible.
	I think it follows from all that I have said that this terrible disease is by no means an easy one to deal with. I believe that the noble Lord, Lord Lucas, has done a considerable service to the House in bringing to our attention many of the factors that need to be considered. His overwhelming message is to avoid complacency and over-optimism. I hope he will accept from me that I understand that we need to be careful in monitoring what is happening and in ensuring that we have the mechanisms in place to deal with problems that may arise.
	I hope I have reassured the noble Lord. I am happy to engage in further discussions with him and thank the House for its tolerance in listening to my creaky voice for 20 minutes.

House adjourned at twenty-five minutes before ten o'clock.